For a consumer in today’s world, there are a lot of different payment methods to choose from. Gone are the days where cash alone was king, though cash is still used a lot as well. Out of all the various new payment methods available, credit and debit cards are the most popular, as together, they are responsible for over 50 percent of all transaction value your business is likely to receive, according to the most recent triennial Federal Reserve Payment Study conducted by the Federal Reserve Bank of San Francisco in 2012.
However, while debit and credit card payments have been constantly increasing in popularity, the question of whether something new and better will come along to replace them is also an issue that some have considered. While only time will truly tell if the credit card will fall out of favor anytime soon, there are definitely changes in how card-based mobile payments will work in the near future.
What to Expect of the Future
Like in so many other areas, the technology of credit and debit cards in the U.S. is behind that of most of the rest of the world. Which, having traveled internationally fairly extensively myself isn’t really that surprising. I have read in several places that there are plans to rectify that in the future with a chip-and-PIN system, which will be nice to see for all concerned.
According to the Wall Street Journal, a chip-and-PIN card payment system functions similarly to the current swiping method of using cards. Instead of sliding your card through a magnetic strip reader, you will insert your card into a slot in a scanner machine that can read a microchip embedded in the card. This system will also require the use of a PIN if the issuing card company implements that system.
While the chip-and-PIN technology provides a couple of benefits, the most important is that of security. Magnetic strips are much easier to duplicate than a microchip with a PIN. And in fact, this additional security is one of the main reasons U.S. card companies are finally making the switch.
Card Payments and Your Business
Regardless of the fact that updates to how credit and debit cards function will be implemented within the near future, the current capability of your business to accept card payments won’t really change. You will need to upgrade your hardware to the new readers, however, once the switch occurs.
While it might be tempting to pass on the need to update your business’s card processing hardware, that really isn’t an option to consider. No matter how much you wish you didn’t have to deal with card payment transaction and processing fees, that aspect of business won’t ever go away as long as cards are still used.
Why Bother with Card Payments Anyways?
Even though the update to card technology will likely be somewhat of a hassle, it will be worth your time and effort for a variety of reasons. The first being the enhanced security features the chip-and-PIN system will provide. This will be beneficial to your business, as customers will be more trusting and likely willing to use their cards at your business when they know a giant data breach is much less likely to happen. The other reason behind the switch being worthwhile is simple; if you wish to continue maximizing the number of sales and customers your business receives, then you need to continue accepting whatever payment methods customers want to use.
If you haven’t already implemented a means to accept card payments in your business, don’t wait until the technology update. They aren’t expensive, the mobile reader offered by Shopify is only $20, and even though you’ll need to buy new hardware next year, your business will likely make more money during the next twelve months compared to not accepting cards at all and waiting.
Photo courtesy of: Sean MacEntee