Over the past few weeks, we’ve been discussing EMV adoption within the United States. Specifically, what’s driving adoption, what’s slowing it down, and how the card schemes are creating enhancements to speed up chip-based transactions. Not a day goes by where EMV isn’t in the news somewhere. However, when it comes to payment trends, not everything has to do with EMV. What’s quite interesting is that, while EMV is experiencing slow but steady adoption rates, consumers are pushing merchants to adopt additional alternative forms of payments as well.
For instance, consider NFC-based contactless payments. Because of the popularity of contactless payments in the U.K., we’re beginning to see merchants that don’t offer contactless payments facing frustrated customers who expect this easy and secure transaction method. Contactless transactions are becoming the expectation of U.S. consumers as well.
Whether merchants are eager to appease contactless-seeking consumers or meet the requirements of the EMV liability shift, the result will be the same: in the U.S., upgrading payment infrastructure is becoming a top priority among merchants.
However, this shift to new terminals isn’t just something that benefits customers. For forward-thinking merchants, today’s latest smart terminal technologies do more than simply process a payment. Indeed, they allow merchants to leverage data in new ways, which will have a transformative impact on retail. By combining EMV, P2PE, tokenization, baked in apps, cloud services, contactless payments, and alternative payment methods, not only should merchants experience significantly lowered levels of card present fraud, those merchants will have access to new business models (i.e. omni-channel selling), new revenue streams, and new ways to reduce costs from data analytics solutions. Never before has the ROI on payment infrastructure upgrades been so immediate or impactful. Additionally, what were once solutions and capabilities available only to very large merchants are now available to the small, giving them the ability to compete in new ways.
The payment upgrades taking place in the U.S. will soon reach a tipping point. The liability shift with its resultant chargebacks to merchants is pushing the process along well enough, but customer expectations and exciting new capabilities from smart terminals will accelerate upgrades even more. When the percentage of EMV-enabled locations gets a bit higher, I expect you will see the straggling merchants follow suit at an accelerated pace. When EMV and contactless payments become so normal that customers expect it, it will push the tail of the market to convert.
The bottom line for software developers is that never before have merchants been so aware of new payment technologies and untapped features and benefits. Many merchants are shopping for solutions now. It’s understandable if you’re unsure of how to bring next generation payment capabilities to your software, so I encourage you to contact our Creditcall offices. We have a proven track record in payments innovation on Windows-, Linux-, Android-, and iOS-based platforms and can help you navigate this potentially confusing and complicated landscape.
Insights from Lars Pedersen, Creditcall CEO
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