We’ve come a long way since the day when payment options came down to the simple question of “cash or charge.” Whether your business is brick and mortar or online, there are numerous forces shaping your options for payment processing, from changing consumer preferences to new technologies. Trends for payment processing are evolving, and staying on top of the industry is important for providing secure, convenient customer experiences that also reduce your own business risks.
Here are four interesting payment processing solutions to watch that can help you deliver simpler, faster and more seamless payment experiences that align with both the market and consumer expectations.
The advent and growing proliferation of EMV chip cards is leading to the slow death of the signature. Over the last year and a half, major credit card brands such as MasterCard and Amex have done away with signature requirements on magstripe and EMV transactions, and starting in April 2019, MasterCard plans to eliminate the signature panel on the backs of cards altogether.
Does this trend mean your business can afford to follow suit and skip asking cardholders for their signatures? You might want to proceed with caution. According to EMVCo, more than 50 percent of card-present transactions in the U.S. still do not have EMV. In addition, there are still scenarios where a signature is either required or can reduce your risk of costly chargebacks.
In the race to provide faster, frictionless transactions, near-field communication technology (NFC) might be a game changer. Though the technology was patented back in the early 1980s, mobile and tap-to-pay payment systems are now beginning to explode due to the popularity of mobile phones. According to a report by Accenture, nearly two-thirds of consumers plan to use a mobile wallet by 2020.
NFC payment systems store encrypted credit card information on a cardholder’s phone, and simply require the customer to pass their device near a NFC reader and accept the charge. Processing occurs almost instantly and does not cost any more than traditional credit card processing fees. Meanwhile, they are also more secure than magstripe payments and can present a faster and more convenient option that consumers increasingly desire.
As a business owner, you might find it hard to keep up with varying credit card security requirements yourself – much less ensuring that employees are informed on brand-specific signature rules and other guidelines. But understanding this information, and remembering to apply it to all transactions, is crucial to reducing your risk in the event of a fraud dispute. While traditionally, losses in such instances were passed onto banks, the EMV liability shift makes businesses responsible for any losses. Smart Terminals can reduce the risk of having to remember the guidelines attached to each credit card your business accepts because they are capable of recognizing the card being used and will adapt the transaction requirements based on that brand’s rules.
Virtual Terminals can further reduce the risk to businesses by offering a secure way for businesses to keep credit card data on file for future transactions, as well as storing all transaction information digitally (see below), so that records can be more efficiently pulled in the event of a dispute.
Seinfeld fans might remember George Costanza’s infamously bulging, paper-filled wallet. A growing number of Americans – and especially younger Americans – are eschewing paper receipts in favor of virtual options. Offering paperless receipts is especially important if your business targets younger and millennial customers. In a YouGov Omnibus survey, Americans aged 25 to 34 were twice as likely as those aged 55 and older to prefer electronic receipts.
There are several forces driving the paperless trend. From a cardholder point of view, electronic receipts can reduce clutter and improve the ease of record keeping. Environmental concerns are also a major driver. According to Green America’s Skip the Slip report, paper receipts consume more than three million trees and nine billion gallons of water annually and generate 302 million pounds of solid waste and four billion pounds of carbon dioxide.
Paper receipts also pose a health risk to those who handle them – including both customers and cashiers – as an estimated 93 percent are coated in Bisphenol-A (BPA) or Bisphenol-S (BPS). These chemicals are absorbed through the skin almost instantly, and can cause developmental and neurological problems. Retail employees who regularly handle receipts have more than 30 percent more BPA and BPS in their bodies.
Printing receipts costs more, too. By the time you add up fees associated with a receipt printer, paper, ink, transportation and storage space for all those receipts, your business could be looking at nearly $900 in startup costs and several hundred per month on storage and paper and ink refills to support paper receipts. Meanwhile, receipts stored in the cloud are secure and won’t fade, rip or crumple the way paper does.
What trends are currently driving the way your processes payments? Which do you see affecting you in the near future? Discuss how payment processing is changing for your business in the comments below.