Consumers are taking advantage of new ways to shop and they’re gravitating to retailers and businesses that make it easy and safe. Shopping for groceries or household items online, ordering food with delivery services, or buying goods online and picking up curbside requires flexible digital payment options.
While many consumers are adapting to this new normal and changing the way they pay, there are some businesses, services, and organizations that traditionally rely on check payments. Checks pose an interesting challenge for customers and businesses in the current environment. Allcard USA makes it easy for Business owners and Consumers to benefit from this once traditional form of payments, the check. Now it is simple to accept checks electronically
However, there are options. eChecks provide customers with another digital solution that limits contact and makes it easy for recurring payments. Merchants benefit by lowering the burden of processing traditional checks, while providing additional payment options to their customers.
eChecks provide many benefits:
Additional digital payment option to limit contact
Reduce processing and back office costs
Easily manage recurring payments
Faster processing and deposits than traditional checks
Limit potential fraud exposure
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For more about eChecks and how they work check out https://www.thestreet.com/personal-finance/what-is-an-echeck-15038297
48% of consumers surveyed decreased overall spending since the pandemic started, but 28% of the respondents have increased their spending.
26% of surveyed consumers expect to use cash less after the pandemic than before and 18% expect their use of cash to increase.
41% of respondents reported they have a contactless credit/debit card, showing there is lots of room to grow consumer access. Of those respondents, 60% use their contactless card for at least half of their purchases.
Consumers are currently most comfortable with social activities such as smaller events and being outdoors. An average of 41% of consumers are comfortable resuming their normal lifestyle now, including those that are comfortable if they at least take protective measures such as social distancing.
Contactless Payment Market To Witness Steady Growth of 15% During 2020-2025
According to a recent study from market research firm Global Market Insights, the contactless payment market is set to grow from its current market value of more than $40 billion to over $100 billion by 2026, gaining remarkable traction over the 2020 to 2026 period.
The worldwide contactless payment market is poised for a considerable expansion in the years ahead, driven by its increasing benefits such as high safety and security. These payment solutions are often embedded with the same protection as that of chip & PIN payments, making them much more reliable than hard cash. Also, companies have been working to ensure that contactless cards and devices are integrated with numerous layers of security to protect the user from fraudulent transactions, making them an ideal choice for myriad applications.
The ongoing COVID-19 pandemic has provided an unexpected impetus to the growth of contactless payment industry. Driven by nationwide lockdowns and the imposition of social distancing measures, these payment solutions have been deployed on a very large scale since the last few months.
With respect to the type of device, contactless payment market is divided into PoS terminals and smart cards. Of these, PoS terminals segment is anticipated to depict substantial growth on account of the rising implementation of numerous technologically advanced solutions that enable convenient, safe, and speedy transactions.
With respect to the application segment, contactless payment industry is divided into retail, warehouse and logistics, hospitality, healthcare, entertainment, transportation, and others. Of these, the retail segment is estimated to depict an appreciable growth rate, driven by the surge in the demand for immediate transfer settlements from e-commerce retailers and merchants. Since contactless payment solutions provide a highly competitive edge to the regional retail and e-commerce businesses by ensuring a rather affordable and quicker mode of transaction than the legacy systems, they are rather popular in the retail industry.
Another major application area that provides a push to the overall contactless payment industry is the hospitality sector. Increasing demand for advanced contactless PoS systems from restaurants and resorts so as to ensure a rather pleasant customer experience through secure and quick transactions will augment contactless payment market share from the hospitality sector.
Regionally speaking, contactless payment market is segmented into Europe, Asia Pacific, North America, Middle East and Africa, and Latin America. Of these, APAC is anticipated to emerge as a highly lucrative regional revenue pocket for contactless payment industry, given the rising penetration of smartphones across the emerging nations of the region. In addition, the region is remnant of numerous initiatives brought forth by governments, pertaining to the increase in digital transactions. Also, the number of e-commerce users in the region has been on a rise lately, increasing the adoption of contactless payments across SMEs, in regions such as India and China, thereby augmenting the APAC business outlook.
Latin America is another region that is poised for substantial growth. Rising number of government-led initiatives subject to the adoption of contactless payment solutions so as to promote the cashless economy culture will proliferate the regional industry expansion.
Governments worldwide have been playing an intrinsic role in increasing the adoption of contactless systems in their economies, which will add impetus to the market growth. Additionally, they are also concentrating in developing their own advanced contactless payment solutions – for example, Faster Payments – from the UK, FAST – from Singapore, Swish – from Sweden, etc.
However, issues related to interoperability among various RTP network schemes such as the Society for Worldwide Interbank Financial Telecommunications (SWIFT) and The Clearing House (TCH) in tandem with surging cybersecurity concerns, may restrain the market growth to some extent over the forecast period.
Contactless payments have been experiencing a steep rise outside of the U.S., particularly as a result of the COVID-19 outbreak. In the U.K., where almost 50 percent of payments are contactless, the spending limit for contactless payments was increased in April from £30 to £45 so that even more transactions could be paid via this method to avoid the danger of infection. In the U.S. merchants are also removing the prompt for requiring signature during the pandemic, which is in-line with changes released by Visa in 2018 to no longer capture and validate signatures for compliant EMV devices.
Will it take something like COVID-19, and the concern for hygienic payment processes, to finally drive contactless payments adoption domestically? Could this be the push consumers needed to change their payment behaviors, and, as a result, increase contactless payment options offered by retailers?
A March study from the Electronic Transactions Association and The Strawhecker Group found that for those businesses still accepting payments on-site, 27 percent noted an increase in contactless payments made through smartphones and contactless cards. The survey also found that customers are conducting more mobile purchases.
Shifting behaviors like these demonstrate that consumers are more hesitant to pay by traditional methods like inserting their credit card into a terminal shared with other shoppers or exchanging cash with cashiers at the point of sale (POS). And once the pandemic is over, these consumers may welcome the more convenient method of contactless payments.
It’s been found that an EMV payment with signature takes just under 40 seconds, a normal card payment with PIN can be 29 seconds, and a cash payment takes a total of 22 seconds. However, when you only have to hold your mobile phone (Apple Pay/Google Pay) or card up to the POS terminal without entering a PIN, customers can clear the cash register in 11 seconds. Biometric authentication on a mobile phone therefore has its appeal for both retailers and consumers.
Incentives like loyalty card programs or digital loyalty coupons are beneficial in driving further adoption of contactless payments. Furthermore, many customers are increasingly managing these benefits conveniently and centrally on their smartphones, making this a natural fit. The new generation of POS terminals provides the ability to use payment applications like PayPal as well as loyalty apps and additional checkout apps in one device — making these a good fit for retailers that want to meet consumers’ desires for contactless and mobile payment options now and in the future.
So, will this all drive an increase in contactless payments adoption and usage in the U.S.? With consumers’ changing purchasing behaviors in the wake of COVID-19, concerns about the hygienic aspects of paying with cash or credit cards, and overall desire for convenience and expediency, all signs point to “yes” at this time.
Now would be a good time for retailers to re-evaluate their customer payment options to ensure they have the contactless and mobile payment methods desired to be able to meet their current needs — and future requirements.
Jed Danbury is a vice president at Computop, a global payment service provider. He has been working in the banking and merchant processing industry for more than 15 years.
Contactless payments may finally be gaining further adoption by U.S. consumers. Spurred by prevention efforts in reaction to the Covid-19 pandemic, many consumers—51%—use some form of contactless payment, Mastercard Inc. says.
In what may be the most detailed data yet publicly released about U.S. consumers and contactless payments, Mastercard’s survey of 1,000 U.S. banked consumers between April 10 and 12 also found that 88% of those who had an opinion said adoption was easy. More telling may be that 56% say they will continue using a contactless payment method when the pandemic ends.
Mastercard, the other card brands, and Silicon Valley tech giants like Apple Inc. and Google, have been promoting contactless payments for years. The tipping point, it appears, may have come with concerns over cleanliness and social distancing driven by the Covid-19 pandemic. Much of the marketing for contactless payments centered on convenience in drive-throughs and in transit. In the first quarter, global contactless payment use increased 40% from a year ago.
These perceptions of safety and convenience, however, prompted nearly 33% to put a contactless card in the coveted top-of-wallet position. That figure climbs to 43% for those under 35 years old and to 35% for affluent consumers. Overall, 57% say paying via contactless is a little or much more top-of-mind now than pre-pandemic.
Indeed, 51% say they are using cash less often or not at all since the pandemic began. Globally, 80% of contactless transactions are less than $25. Mastercard also conducted the survey in 18 other countries. In many international locations, the card brands have increased the limits for contactless transactions.
“Social distancing does not just concern people’s interactions with each other. It includes contact with publicly shared devices like point-of-sale terminals and checkout counters,” said Blake Rosenthal, Mastercard’s executive vice president and head of acceptance solutions. “Contactless offers consumers a safer, cleaner way to pay, speed at checkout, and more control over physical proximity at this critical time.”
Seventy-seven percent of U.S. consumers surveyed say contactless payment is a cleaner way to pay and 70% say it’s more convenient than cash. Sixty-seven percent view it as faster than cash and 45% say it is their preferred in-store payment option. A majority—51%—view contactless payments as more secure than cash and 49% say Covid-19 prevention efforts inspired them to use contactless.
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While consumers spent nearly $3 billion holiday shopping on their smartphones this year, more than any other Black Friday and Cyber Monday in history, a new report from iovation has found that suspected online retail fraud also increased this holiday season.
According to the report, suspected online retail fraud increased 29 percent during the start of the 2019 holiday season when compared to the same period in 2018. What’s more, the report indicated a 60 percent increase in suspected eCommerce fraud during the same period from 2017 to 2019.
The growth in suspected online fraud means that 15 percent of total suspected fraud during the holiday season so far took place online, up from 13 percent in 2018 and 11 percent in 2017. Online fraud in general accounts for 10 percent of suspected fraud across the rest of 2019, the report found.
ETA Expert Insights: PCI PIN Security Update 3.0
By Donna Gem, GEM Security Solutions; Greg Leos, Bank of America Merchant Services; Sam Pfanstiel, ControlScan, members of the ETA Risk, Fraud and Security Committee.
The Payment Card Industry Security Standards Council (PCI SSC), published version 3.0 of the PCI PIN security requirements in August 2018, and which has now gone into effect on October 1, 2019. This updated version was a collaborative effort between the PCI SSC and the American Standards Committee (ASC) X9. Together they integrated the ASC TR-39 into the PCI PIN security requirements to amalgamate it into PCI PIN 3.0. Here we examine the changes and what you need to know about the latest requirements order to ensure your organization remains compliant.
Summary of PCI PIN Update 3.0:
The usage of multi-purpose personal computers for key loading is phased out. Clear-text secret and/or private keys and/or their components that exist in unprotected memory outside the secure boundary of a secure cryptographic device (SCD) are to be phased out.
Allowance for the injection of clear-text secret or private keying material into point of interaction (POI) devices or other SCDs will be phased out starting with key injection facilities (KIFs) in 2021. Only encrypted key injections will be allowed after that time.
The requirement that encrypted symmetric keys must be managed in structures called key blocks has been broken into three separate phases with different implementation dates, the first of which went into effect for service providers this past June.
Host support for Advanced Encryption Standard (AES) PIN block for both encryption and decryption will be required over the next five years to facilitate adoption of this stronger encryption algorithm by POI devices.
A new PCI PIN Assessor program includes the creation and management of the new Qualified PIN Assessor (QPA) designation by the PCI SSC, along with a listing of approved QPAs on the pcisecuritystandards.org website.
In addition, the PCI PIN 3.0 update has brought with it a multitude of changes to the requirements specifically for having comprehensive documentation to attest that procedures exist and are documented and followed by an organization’s personnel.
Existing in-flight PCI PIN 2.0 assessments by a Visa SA must be completed and submitted prior to December 31, 2019; with all other assessments being performed by a QPA against the PCI PIN 3.0 requirements, testing procedures, and reporting template. Organizations for which PCI PIN applies need to review their documentation and look at the new requirements to ensure they will be compliant when the QPA comes onsite.
Understanding the difference between compliant and non-compliant “Convenience Fee” payment models.
By Cleveland Brown, Chair of the ETA Payment Sales and Strategy Committee.
There has been a lot of movement in the payments industry recently regarding fee-based payment processing models. While there are compliant ways to implement these solutions, many non-compliant models exist.
Recently, we highlighted a pattern of surcharge programs masquerading as Cash Discount solutions. A similar trend is emerging with Convenience Fees models: There are solutions available on the market that add fees to purchases or payments as a separate transaction. While these programs are often billed as “Convenience Fee” models, charging a convenience fee as a separate transaction is expressly prohibited by the card brands.
Often times, ISOs, ISVs, and resellers are unaware of the non-compliance of the solutions they’re promoting, which opens their business to risks of liability and leading to potentially severe consequences.
Anyone can invest in cryptocurrency. To use it, a consumer must first purchase a crypto amount. Let’s use Bitcoin as an example. The current cost for 1 Bitcoin is about $11,000. If you accept crypto payments, a consumer can purchase a Bitcoin at that amount, and then sell a fraction of it when they want to make a purchase at your store. For example, if they had purchased one Bitcoin at $11,000 and wanted to use it to make a $100 purchase at your store, they would need to sell 1/110 of that coin to make their purchase with you.
Bitcoins or other cryptocurrencies are securely stored in a digital wallet that is protected with a secret key. Everyone has two keys, one public and the other private. The public key can be shared with others so they can send you Bitcoin, while the private key is what you would use to send a payment. If someone else discovers your private key, your Bitcoin are at risk of being stolen. Therefore, make sure your private key is safely stored at all times.
When a payment is made it is first encrypted, then broadcast to the cryptocurrency’s network and prepared to be added to the public ledger. Next, transactions are recorded on the public ledger using a process called “mining”. Anyone who uses a certain cryptocurrency (such as Bitcoin) can access the full ledger if they choose. The amounts paid for each transaction are public, but sender information is encrypted. Many transactions are posted at the same time and added in sequence to the ledger.
Accept Bitcoin and Other Cryptocurrencies
If this seems complicated, don’t worry. All of the work and any of the risk associated with a transaction like this is the responsibility of the consumer. Accepting crypto payments with Electronic Merchant Systems simply means you’re giving your customers an additional way to pay. We’ll take care of processing their payment and will fund you the money in cold hard cash.
Other than the obvious customer convenience factor, there are unique benefits to accepting crypto payments for your business.
Forget About Fraud and Chargebacks Crypto transactions are virtually fraud-proof and eliminate chargeback risks for merchants. Purchases made with cryptocurrency are exact and final (unless you choose to process a refund). You are in complete control of the cash you receive. Check out The Truth About Cryptocurrency Processing for more information.
Encourage Innovation Gain a competitive advantage by being one of the first to offer this alternative payment method and cater to digital wallet users.
Speed Up the Process Payments move more quickly, which helps you to avoid the traditional wait time associated with global transactions.
Make International Payments Easy Simplify international payments by eliminating foreign transaction fees and currency conversions.
Crypto Processing with Allcard USA
Currently, we and our partners can help you to accept Bitcoin, Ethereum, and Litecoin payments. There are various options for how you can receive these payments, depending on your business type. These options include:
Invoice Create an invoice and email it to your customer.
Face to Face Accept a crypto payment directly from your customer’s digital wallet.
Payment Button on Website Add a button to your website for online crypto payments.
Custom Integration for Your Website This option requires some advanced coding and will allow you to accept crypto payments through your eCommerce website.
A new Lost in Transaction report from ETA member and global payments technology company Paysafe has found that Gen Z, defined as consumers aged 16 to 24 years old, are embracing new and different ways to pay at higher rates than older generations.
According to the report, 40 percent of Gen Z consumers have some experience making in-app payments, and 15 percent make them regularly. That’s significantly higher than all other consumers, at 27 percent and 9 percent respectively. Further, one in three (34 percent) of Gen Z have used a mobile wallet, a full eight percent higher than other consumers. Whereas one in non Gen Z consumers currently use mobile wallets regularly, 14 percent of Gen Z consumers use them regularly.
Mobile eCommerce is also a popular way to shop and pay for Gen Z, but it is equally as popular with the older Millennials (aged 25-39). Just under half – 47 percent – of Gen Z and Millennials buy goods on their mobile phone more often than any other platform. That is much higher than older generations. Just 28 percent of Generation X (aged 40-54) and 10 percent of Baby Boomers (aged over 55) prefer mobile shopping.
For in-store payments, Gen Z prefers options, the report found. Fifty-three percent prefer to shop in stores that accept contactless payments, and physical cash is still used by eight in ten Gen Z shoppers when they are making purchases in brick-and-mortar stores. Voice payments are also exciting options to Gen Z, the report says. Over half said they would use voice technology to sign up for a subscription service (52 percent) or make a one-off entertainment purchase (51 percent), and 43 percent would be prepared to pay for groceries using voice commands to their smart fridge.
“This generation is naturally more comfortable with technology but has also been exposed to a much broader set of ways to pay,” said Phillip McHugh, CEO of Paysafe Group, in a press release. “Accepting new payment types and expecting lots of flexibility and ease will be table stakes going forward.”
According to a press release from Paysafe, Lost in Transaction: Gen Z expectations at the checkout is an independent research project commissioned by Paysafe and supported by London-based agency Loudhouse in Q2 2019. The research was completed among 6,197 consumers from the US, UK, Canada, Germany, Austria and Bulgaria. Respondents came from six different age groups and a variety of different professions.