Credit Card Processing Yesterday, Today, and Tomorrow
In this article, you’ll learn:
EMV works for your security
How a POS system provides actionable analytics
Mobile commerce is the future
SumUp’s technology encrypts data while processing payments
Credit card processing has come a long way since its dinosaur days as a Western Union-issued metal plate that offered neither credit nor convenience. When John Biggins developed the first credit system in 1946, charge cards were nothing more than rudimentary slips of paper, but within four years, the credit industry was booming.
Diners Club was first to jump on the bandwagon, followed swiftly by American Express in 1958. By the time the swinging Sixties rocked and rolled their way into the world, MasterCard and Amex were thriving. Neither credit card companies could have imagined how far their innovations would evolve.
Today’s systems use radio frequency identifications, antennae, and microchips to process payments anywhere at any time. Few wallets in the USA lack a microchip. The next growth spurt will come from online card payments processing, as mobile wallets, transportable point of sale devices, and biometric security systems overtake the market
Much of the POS industry’s future will simply be more widespread versions of the technology that’s already available today. Mobile processing will one day create the first truly cashless society. Contactless payment systems with the biometric authentication were introduced to Asian markets in April 2017. These systems will soon use palm vein patterns and iris recognition without the need for batteries.
Today’s retailers are thus left with only two options: to introduce EMV payment systems as a foundation for the coming years or sink under the weight of the innovations that are about to dominate the business world.
The security offered by the EMV technology in use today is unparalleled, and while mobile card processing will soon be the new global standard, the only way to gain that functionality is through EMV implementation.
EMV is the technology created by Europay, MasterCard, and Visa to allow terminals to connect directly with a card’s microchip, which generates a cryptogram to prevent fraud and theft. In simple terms, EMV chips are like tiny computers that carry and transfer information to and from mobile devices.
Contactless mobile payments can be achieved with NFC (near-field communication) or the more advanced Bluetooth technology. These techniques are often misunderstood to be independent of EMV, but they’re actually extensions of chip and sign cards. For this reason, EMV implementation is the only way to lay the foundation for future advances.
Although the United States only implemented EMV as a national standard recently, many facets of it are already mandatory. The 2015 liability shift placed responsibility for card fraud firmly on business’ shoulders if they lacked EMV technology.
The only way to insure yourself against liability is by processing EMV cards, but not doing so is doing your customers a disservice too. Magnetic stripes are easily replicated because they store information that never changes. Counterfeiters can thus easily convert them into cash.
EMV chips generate a new transaction number every time they’re used. They can’t be duplicated in traditional ways, and as long as your reader encrypts all the data it receives, EMV protects against identity theft as well.
Historically, the credit card sector has only used partial solutions to theft to save pennies in exchange for exorbitant credit card processing fees. EMV is the first sound investment into fraud protection made by the industry in years, and it’s come with even lower fees for its users.
For example charges no monthly costs or fixed fees. Only one fee is ever levied per transaction, and it’s calculated as a percentage of the payment.
Credit card processing for small business has at last become a viable option, even for companies that need to manage transactions at their clients’ doorsteps.
Tomorrow’s business world will be more automated and artificially intelligent than even George Orwell could have imagined, but analytics and AI are already raising profits today. The days when credit card payment processing was simply a method of payment are over.
Today, your card reader is not just a POS system, but a business partner, gathering information that can enhance every aspect of your business from its executive management to its accounting. The data captured by credit card processing machines is valuable, and it can be converted to insights that affect your bottom line.
The key to creating a flexible analytics strategy lies in the universality of its software. Credit card processing that feeds data into programs like Excel immediately gains the capacity to extract information from a huge range of compatible analytics applications. Card payments processing can integrate with your:
Payroll and human resources management by recording each staff member’s sales and hours.
Marketing department by gathering information about your current promotions and campaigns. This way, marketers can adjust and improve on their efforts while gathering information about your demographic.
Loyalty and gift card programs.
Accounting department by automating payouts and other aspects of bookkeeping.
Product research and development including niche industry insights such as restaurant menu optimization and shift preparation
Actionable analytics can be taken to their zenith with API-created applications that link to your credit card processing reader.
They will turn your data into visual information and provide static dashboards so that you can achieve flexibility with your metrics and small data. This way, you’ll be able to monitor your sales as they relate to any corresponding promotions, product lines, or human resources strategies you’ve implemented.
You belong to the era of big data. All you have to do to benefit from it is choose a credit card payment processing tool that can integrate with API applications.
One day, simply tapping one device to another will be enough to process a payment, yet even today, merchant credit card processing has already shifted into a mobile landscape. Seven percent of Android users and 17% of Apple users had used mobile credit card processing by the end of 2015.
The trend had a patchy beginning, partially disrupted by the EMV revolution, which offered better technology than mobile services alone could provide. Tap-to-pay technology is still evolving, with wrist devices and the like entering the market. As mobile credit card processing becomes more secure, smartphones will become a more common way to handle contactless payment processing.
Until then, readers like SumUp are small and mobile enough to travel door to door or table to table. Credit card payment processing has changed the way businesses operate, allowing them to accept payments online and off from anywhere, as long as there’s a mobile phone or tablet in reach.
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Charles Stack created the world’s first online store in 1992, three years before the internet became fully commercialized. Globalization is now in full swing, and in the coming decade, Inc. magazine projects that the boundaries between on and offline businesses will evaporate.
If you think the internet is the marketplace of the future, though, you’d be wrong. M-commerce (mobile commerce) is expected to be the next giant trend, leading point of sale systems globally.
Automated payment processing will detect client preferences and their price sensitivity so that card processing can integrate more thoroughly into your marketing strategy. Customized card payments processing will eventually advance to offer each unique buyer a specialized pricing and payment structure so that you lose fewer shoppers at the point of sale, but it’s not too early to start putting personalized programs in place.
SumUp gives you access to a wide range of payment applications through API management tools. API stands for application programming interface, and it lets you create applications and services that “plug” into your reader.
Technophobes needn’t worry about development—there are a host of applications ready and waiting for you that can manage subscription plans, automate your billing, and manage your inventory.
API can turn credit card processing for small business into an automated, highly intelligent business analyst who interacts uniquely with every buyer you have.
Credit card data breaches have been a sore point in the industry for years, and their costs seep into the lives of your buyers as much as they detract from your revenue.
Customers can and do move onto alternative retailers if they feel your method of accepting credit card payments isn’t secure enough. The press is quick to publish every data breach catastrophe that happens, frequently creating a social media crisis of epic proportions that affects you more than you might realise.
EMV has created a significant dent in these numbers in all 80 of the countries that have used it. Retailers experienced a 26% drop in card counterfeiting year over year due to EMV migration. Contrast that to the annual 20.6% increase in card fraud until now and you find chip and sign technology is winning the race.
History proves that theft will always evolve with the technology that fights it, and a 2016 Iovation/Aite Group study found that the majority of tomorrow’s credit card fraud will come from payments processed online without a card. In other words, the mobile and chip card revolution will do precisely what it was intended to do: eradicate card counterfeiting.
When whisky dealer James Ritty developed the first point of sale system in 1879, he called it “incorruptible.” It was a simple tool to prevent staff thefts, but it was the first step towards what has become a $36 billion industry.
It was only in the disco era that cash registers became computerized. By 2014, m-commerce solutions became the sector’s most important technological advancement, with chip and sign cards following closely behind.
Today’s POS system doesn’t wait for buyers to come to it—it travels to customers wherever they are, but an even bigger revolution is on the way. Experts predict that, by 2020, the POS sector will be worth around $150 billion. This projection is critical to the way you handle purchases today because it spells out how sophisticated your POS strategy needs to be if it’s to compete.
An EMV-based POS is, however, one of the cheapest ways to gain market share.
Your credit card processing system is only as useful as its software, which needs to support every operating system, integrate with all your other programmes, and fit seamlessly into your point of sale strategy.
SumUp’s software development kit 9SDK functions on Android and iOS. Transaction IDs are generated for each payment, and sensitive information is kept off your phone.
The terminal is one of the few on the market that encrypts sensitive information so that your buyers’ data never falls into the wrong hands.
Service excellence depends on payment security, and no business can afford the losses associated with data breaches. With credit card processing fees of only 2.75% of each transaction, SumUp packs enough value into its service to deliver outstanding returns on investment that leaks into every aspect of your business. Your future success is within reach, and SumUp will lead you there.
SumUp offers you the best solution in card payments. With SumUp, you can quickly and easily accept credit and debit card payments with your smartphone or tablet.
EMV payment processing is a must for your clients’ security and a must to keep up with competitors in the wake of this innovative age. With the right credit card processor, you can join the realm of mobile commerce while harnessing the available analytical tools to propel your business into the future.
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