What Your Business Needs to Know Now and in the Future About Credit Cards and Mobile Payments
Your business may already be accepting credit cards — which is great — however, you may not know everything about the changes in how online and mobile payments are altering the way we do business. The additional ways of collecting payments for your goods or services can potentially offer you new growth both now and in the future. The new growth comes when you are able to offer numerous ways in which customers can pay you and then expedite the purchases because of the ease of payment — this new dimension added to online mobile payments is especially becoming crucial with the demands and the buying power of the Millennials.
The Rutgers University Bachelor of Arts in Business Administration program recently put together an infographic to help businesses better understand how these payment methods are changing how they do business. While you may already be familiar with Europay Mastercard Visa (EMV), standards and Near Field Communication (NFC) technology, there are other crucial areas that the infographics below will point out, which are important to think about as you plan your strategy and your response to the new variety of effective ways to take payments in these rapidly changing financial markets going forward.
Credit cards are the norm in the U.S. and account for $884.8 billion of revolving debt as of January 2015, making up nearly 5 percent of the dollar value of the U.S.
The average U.S. household carries credit card debt of nearly $16,000. The number of credit cards went from 344.53 million in 2014 to 359.64 million in 2015. However, the number of Americas with revolving credit card debt is declining.
Also, it is worth noting that consumers are using their credit cards abroad, more than ever before, because the new EMV chip technology helps them avoid foreign transaction fees. For businesses and consumers, there is also the option of charging a transaction abroad in U.S. currency rather than local currency, which helps the merchant, but tends to end up in more charges for the credit card user. This little jab from the credit card companies seems to be something that consumers may not have caught onto yet.
EMV plays another important role in terms of credit card data and security. The research shows that card security is working better, and the statistics are showing credit card fraud in the UK has been reduced by 32.5 percent since the introduction of the chip-based cards. Since the majority of Americans are concerned about their financial information being stolen, EMV cards are becoming a way to help alleviate this concern. The technology implementation used in the chip is beginning to be used in other vulnerable credit areas as well, and we should see the decline of fraud continue — although it sure seems like one area of fraud gets fixed and the hackers are right there figuring out new and improved ways to cause trouble for commerce.
Another area of growth in mobile payments has been accomplished with Square and PayPal. These two companies have been leading the way with affordable NFC-enabled tech and EMV-compliant card readers that help small business owners and merchants take advantage of this opportunity to serve customers through the mobile environment. However, these merchants are still concerned about fraud while others were not aware of the liability changes that went into effect on October 1st, 2015. The changes basically say that the credit card companies are are no longer going to be liable for fraud from any U.S. businesses who don’t start using the EMV cards.
Yet, according to research, it would be in businesses best interest to start considering the switch to new POS terminals that offer this technology because mobile payment volume in 2015 topped $214 billion with 150 million transactions handled daily by Visanet, which equates to more than 24,000 transactions per second, illustrating the real opportunity to sell more in this payments area. With 178 million people in the U.S. that have at least one mobile device, there is enormous potential for businesses that provide for mobile payments as well as mobile wallet features.
Another area of opportunity is the ability to accept and process payments in China. In 2014, $6.84 trillion payments from payment cards were processed in China with significant future growth predicted. It’s an area that many merchants and small businesses may want to take advantage of as part of their overall payments strategies.
Check out the infographic below to learn more about how you need to start looking at the payment environment if you want to take advantage of this trend and achieve future business growth.
Special thanks to Rutgers for the image.