Digital Transactions Authoritative, insightful and timely information for payments professionals
By Kevin Woodward
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Because a consumer trying to make a purchase may use a credit or debit card, tap with a contactless card, or scan a bar code, merchants need to know about the range of payment options available to them. That’s why the Smart Card Alliance, a Princeton Junction, N.J.-based association, has published a report called “The Changing U.S. Payments Landscape: Impact on Payment Transactions at Physical Stores.”
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The report’s goal is to look beyond the impending migration of the U.S. payment card infrastructure from magnetic stripe cards to ones using chips, says Randy Vanderhoof, executive director of the Smart Card Alliance. “Merchants say they have to be prepared for whatever the consumer comes in with and offers to pay with,” Vanderhoof says. “They don’t want to turn down a sale.”
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The report covers a range of payments, including near-field communications, mobile-payment card readers, tablet-based point-of-sale systems, geo-location, two-dimensional bar codes, automated clearing house transactions at the POS, and remote ordering, which is paying online and picking up in a store.
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Many of these payment options are influenced by the widespread adoption of smart phones and tablets for commerce just as merchants are beginning to contend with the shift to chip card payments, Vanderhoof says. The blossoming of multiple payment methods may be because of the adoption of smart phones and developers creating unique apps, or because of the upcoming shift in the payment system, he says.
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Could it be because mobile developers see an opportunity while merchants are addressing the changes in the predominant method of payment? Vanderhoof asks. “My sense is, based on how mobile has impacted other markets like cameras, social media, and GPS devices, it becomes the ultimate disruptor of so many things,” he says. “It is unique in that the lifecycle development of mobile is significantly faster than the thing it is replacing.”
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That pace of development and the continuing adoption of mobile devices for payments and commerce will alter payments, the report concludes, and may require a rethinking of what is a card-present and a card-not-present transaction. “It is still too early to tell how the landscape of payments might be impacted by the wave of new technology that is reaching the market,” it states. “In the end, those that can integrate added value, flexibility, and speed to all parties along the payment value chain, without impacting security or privacy, might ultimately have the best chance of success.”
