New technology always takes time to enter the mainstream, all elements need to be functional, tested and proven before the public can start using them.
But there is no question that 2017 will be a year in which we’ll see various new technologies make processing credit cards and other payment options simpler, safer and more secure.
We are clearly getting closer to a cashless society with a variety of payment options that are convenient, fast and as secure as technology allow.
At MyWatchmen, we’ve recently seen a new host of technologies that make buying and selling goods and services, and exchanging money, more efficient for both businesses and customers.
This is happening in both the retail and B2B space.
Here are a few things to keep your eye on.
Use of Mobile Wallet Technology Will Continue to Expand
Convenient mobile wallet technology is about to impact the marketplace in a big way.
Since Apple Pay entered the scene in 2015, and since the subsequent introduction of other providers such as Samsung Pay and Google Wallet, customers have begun adopting this technology thanks to its speed and efficiency.
As we write these lines, Apple Pay is growing by about one million users per week! And Android Pay has just been launched in Canada.
The volume of mobile payments is expected to rise significantly in the coming years, and could reach over 50 percent of the consumer population by 2020.
The most substantial rise will be seen in younger demographics.
This technology has meant a growth in Near Field Communications (NFC).
NFC is a contactless payment technology which enables buyers to initiate transactions using mobile devices and wearable technology.
NFC allows two devices within a short distance (a few centimeters) to exchange data, as long as both devices have an NFC-enabled chip.
As a business, there is no need for you to completely overhaul your payment processing systems to take advantage of this trend.
With the right terminals, you’ll soon be able to begin accepting mobile payments.
At checkout, the customer holds up their phone or other device to the NFC reader, until the transaction registers as “Authorized.”
Receipts are then either printed out or emailed.
This payment trend saves 50 percent of the time required for conventional card payments, and both customers and businesses benefit from the time saved, as well as the convenience.
That’s a big win-win for all parties.
Another trend you’ll see is an increase in mobile and cloud-based POS Devices.
Mobile Point-of-Sale (mPOS) devices such as Square have become increasingly popular because they give businesses a simple means of accepting card payments, no matter where they are.
Since many consumers now expect businesses to accept credit and debit cards, having mPOS terminals is quickly becoming a necessity.
It is estimated that purchases made on mPOS devices will make up almost 50 percent of all POS purchases in the coming two years.
The need for fixed-lane checkout and traditional POS opportunities and applications will continue; however, these new mobile opportunities benefit businesses by offering simple, cost-effective solutions, and benefit buyers looking for a speedy and safe means of payment.
Many businesses are also recognizing the convenience of cloud-based software, and are continuing to adopt the cloud-based trend within POS payment systems.
These new cloud-based POS systems allow businesses to easily accept a variety of payment methods (credit card, cash and contactless payments), while also allowing businesses to track inventory, sales and the performance of individual employees.
Additional advantages of these new technologies:
1. Business information is stored in the cloud, and is accessible anywhere and at any time, as long as an internet connection is available.
2. Cloud-based technology and data retrieval systems are updated more frequently, with little or no extra expenses.
3. Added security – since your information isn’t being stored on a hard drive, if a thief gets a hold of your computer, they won’t be able to access any of your information.
If your password is kept well-protected, your data should remain secure.
A New Beginning for the Bitcoin
Bitcoin, a digital currency created in 2009, is beginning to find a path to wider acceptance.
In January 2016, one Bitcoin was worth USD$350, and is now worth over USD$2,000.
While this value is expected to hold for early investors, the reason Bitcoin will become more prominent in the coming years is that financial institutions are beginning to adopt the technology and invest in it.
Among other advantages, Bitcoin offers lower transaction fees than traditional online payments do, and is operated by decentralized forces, unlike traditional government-issued currencies.
Because some are losing faith in the mainstream financial systems – partly due to global events in India, Nigeria and Venezuela, as well as Western countries – Bitcoin is likely to take on a more significant role in the coming years.
This is not to say you should begin adopting Bitcoin as your payment of choice, but it is a space that will be interesting to watch, and will potentially be beneficial for some businesses and B2B enterprises.
Fraud and Hacking: New Breaches and New Forms of Security
Large-scale fraud and hacking appear in the news quite prominently these days, and have affected major businesses as well as democratic, country-wide elections.
We’ve discussed the importance of PCI compliance in one of our previous posts, and would like to emphasize the importance of your business’ PCI-compliance in the strongest possible terms.
The good news is machine learning and big data are becoming more of a force against fraud and large-scale hacking.
Advanced algorithms have the ability to evaluate every transaction made, and take appropriate, immediate action to mitigate any potential damage.
Large corporations such as American Express have the ability to create very sophisticated profiles of corporate and individual card holders, make accurate predictions about current and future spending patterns, and detect suspicious or devious activity.
These systems are not faultless, of course, and need to be updated constantly; but they go a long way toward decreasing fraud and hacking, which can be extremely disruptive and harmful— for both individuals and businesses.
As a business, make sure you use a PCI-compliant payment processor.
You should also seek out providers who offer advanced security methods, including tokenization and point-to-point encryption
Tokenization is important because it’s a way of securing data using non-sensitive equivalent information—or tokens—that have no exploitable value.
Point-to-point encryption is also important because it converts confidential information into indecipherable code, thereby preventing fraud and hacking.
These types of new technologies greatly improve your ability to secure corporate data.
It’s fair to say that a year from now, and even five years from now, the prevention of fraud and hacking will remain an ongoing area of concern, and will require new and ongoing technological advancements.
Biometric Scanning and Security
Apple Pay currently uses biometric scanning technology.
This technology allows you to simply scan your fingerprint and you’re good to make your purchase; but this is just the beginning of what will be a growing area of personalized security.
The payment industry will eventually begin using more advanced scanning technologies, including iris scanning, voice recognition, and—one day—even DNA verification.
We believe as 2017 continues, you’ll see more of these types of advanced security measures really take off.
If you are a large and rapidly growing business, this is technology you may want to research and consider adopting.
Customers are Looking for More Subscription-Based Models and Rewards
Subscription-based models are becoming more and more popular, and there is no sign of this trend slowing down.
Companies like Dollar Shave Club and Rent The Runway will continue to grow in popularity, because they offer customers convenience and flexibility.
Plus, business owners enjoy recurring payments each month.
Customers are also gradually seeking out businesses offering reward programs.
In order to keep your customers satisfied, you’ll need to keep sending them coupons, deals, and promotions that spark their interest and promote their purchase patterns.
Starbucks and Office Depot have been leaders in these types of promotions; business owners would be wise to take a look at how and what they do, and adapt these tactics to their own businesses, as appropriate.
The most important thing to keep in mind, of course, is that customer service should always be of primary importance.
Subscription-based models and reward programs may be great ideas for your business, and may lead to immediate and mid-term results; but if your customer service is inadequate – both in-person, and in the store – your customers will not return.
Now that you know the six payment processing trends for 2017, make sure you are attuned to your customers’ needs and desires, and responsibly adapt new technologies that address these.
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