After a year when data breach was a keyword, credit card security and secure payment processing were hot topics observed from a far, but too often not discussed in depth. Instead, many organizations only make changes to their systems and procedures when forced to by new rules and regulations. However, the ubiquity of data breaches might cause some businesses to reconsider their payment processing technologies and become an active participant in security instead of reacting to cybercrime.
Many in the e-commerce industry considered 2014 to be a long year, from the semi-explosion of Bitcoin to the introduction of Apple Pay. Now, organizations have a lot to consider as 2015 approaches on the horizon. Here are some important changes in the payment processing industry that businesses of all sizes should focus on in the coming year.
EMV
To ignore EMV would be a poor decision, as this payment method will become the standard by October 2015. This means that retailers and other organizations have some time to prepare, but they will want to act fast or risk losing a good portion of paying customers.
“EMV-compliant payment cards use PIN codes and cryptographic algorithms to authenticate purchases.”
What is EMV? Instead of credit and debit cards employing a magnetic strip containing the cardholders information, EMV-compliant payment cards use PIN codes and cryptographic algorithms to authenticate purchases. Security will improve and in-person fraud will decrease.
To prepare, EVO Payments International’s Senior Vice President Peter Osberg told Pymnts.com that EMV transaction software will need to be installed on POS systems sooner rather than later.
Tokenization
Tokenization will become essential for organizations that want to prevent data breaches. This technology turns consumers’ payment information from actual numbers and identifiers into “tokens” which can only be decoded with keys. Manny Ju, director of strategic partnerships at @Pay, explained to Pymnts.com that payment tokenization will find its way into the limelight in 2015 because the technology will drastically affect security practices for those in the payment processing industry.
Online payments
Business Insider reported that e-commerce is capturing a larger portion of consumer sales than ever before. Essentially, organizations will need to make sure their online stores are capable of providing the best forms of security, as well as implement more advanced anti-fraud measures throughout 2015. However, there will need to be an adequate balance of security and usability if online retailers want to become major players in their industry.
Apple Pay and biometrics
Contactless payments are a huge trend coming into 2015. Even though NFC cards are not a new concept, Apple Pay has spurred an increase in popularity in regard to this quick and easy transaction technology. Mike Gross, global risk strategy director at Experian, told Pymnts.com that Apple Pay will grow due to its convenience, but it is really just paving the way for mobile wallets to become the norm when it comes to payment processes.
Will fingerprint scanning result in less fraud? Most likely.However, CITEworld reported that Intel is working on new biometric technology. This could shake up the current direction that the contactless payment trend is headed. Mobile Payments Today suggested that mobile POS will catch on due to biometrics and the migration to EMV credit and debit cards.
“Currently, the vast majority of mobile POS sales are very basic, payment-only applications,” Rick Oglesby, a senior research analyst for Double Diamond Payments Research, told Mobile Payments Today. “However ISOs and acquirers are gearing up to change that, looking to replace magstripe terminals with EMV-ready mPOS products that will serve as a product hubs, including not only payments products but also loyalty solutions, accounting products, business development solutions, and business management solutions.”
Bitcoin
Appearing seemingly out of thin air, crypto-currencies such as Bitcoin could impact the payment industry due to Bitcoins’ security and ubiquity around the world. Will it have enough of a backing to stand out in 2015? It is hard to tell, and it really depends on the support than the currency gets from local and online retailers.
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