E-COMMERCE
charges -- thereby alienating loyal customers. In general, it’s good practice for business owners to upgrade technology when the opportunity presents itself. As merchants continue to educate themselves about the benefits of EMV readers and, in some circumstances, suffer losses due to fraudulent charges, there will be an inevitable uptick in adoption.
By: Etie Hertz
A
SVP of Payments Shopkeep
s small business owners and payments providers prepare for 2016, it’s important to reflect on the key innovations of the year past and set their sights on what’s to come. In 2015 we witnessed the EMV liability shift, the emergence of mobile wallets, and the rising influence of peer-to-peer payments, and yet there’s ample room for continued innovation within the payments world -- and ever more trends on the rise. Do you think you will pay with Google Glass in 2016? Run all of your transactions via Apple Pay? Here’s a look at some of the top payments trends that will make a splash in 2016, as well as tangible ways business owners and payments professionals can plan ahead. EMV ADOPTION EMV was the talk of the payments world in 2015. While the shift provided merchants with an added layer of security, merchants became liable for fraudulent charges occurring after the October 1 deadline. Changing regulations triggered significant confusion among merchants, with business owners fearing both legal and financial repercussions if they failed to comply. Though the deadline has since passed, there is still a longtail of retailers that haven’t made the adjustment. While EMV adoption is not mandatory, it’s an important way for merchants to future-proof their business. Point-by-point encryption safeguards against hackers capturing, counterfeiting and selling customers’ payment data and when a merchant repeatedly doesn’t have these means of protection, they may find themselves cutting into profits to cover false
24
Payment Quarterly | Q1 2016
6
Payment Trends on the Rise in
2016
NEED FOR DIFFERENTIATION AND CONSOLIDATION Although the writing has been on the wall for several years, payment processing has increasingly become a commoditized market. Coupled with pricing transparency triggered by an increase in competition, flat rates being offered by new competitors, the best way for acquirers to gain traction today is to sell value over price and to offer customers truly exemplary experiences. Successful companies are seeking ways not only to differentiate themselves in the market, but consolidate with leading software brands as well. In the last few years, we’ve seen ample traction in the POS world; ShopKeep acquired Payment Revolution, Heartland acquired Digital Dining, Dinerware, pcAmerica and Liquor POS and First Data acquired Clover. In such a competitive environment, customer acquisition is key to success; by consolidating with major players, payments providers can expand their offerings, providing customers with a full-stack of services such as POS technology, loyalty programs and lending. If a company cannot efficiently scale, it won’t be able to meet customer’s advancing needs, thus endangering its long-term viability. Payments providers should think strategically about the features that would be most beneficial to their consumers, whether social integrations or detailed analytics. Acquiring the right assets could help enhance and accelerate a company’s growth. MILLENNIALS AND PEER-TO-PEER PAYMENTS As the America’s next generation of spenders matures, their financial preferences continue to influence the payments space. Millennials account for $600 billion dollars in