Three New Payment Options You Should Offer Your Retail Customers Immediately

 

Quick and seamless payment transactions are one of the most valuable services you can provide for your customers. If you don’t give buyers the opportunity to purchase your products in a way they prefer, they’ll be forced to take their business elsewhere. By staying on top of payment options and the latest technology trends, you’ll ensure that you’re not letting business walk out the door.

If you’ve been savvy enough to install a mobile payment swiping tool such as Square or PayPal Here, good work. Your retail business likely already appears to be innovative to your customers when they’re standing at your check-out counter, and you swing that white iPad in their direction so they can digitally sign with their finger. But, the buck doesn’t stop there.

Three recent additions that have cropped up in the payments scene are EMV credit cards, contactless payments, and mobile wallets. Because each new payment option comes with an additional cost and effort, it can all seem overwhelming to know which to implement. We’ve put together some guidance so you can understand these new technologies and the impact they’ll make on your business and your customers’ experience.

EMV “Chipped” Credit Cards

You have likely received a new chipped card in the mail from your bank by now and noticed the new chipped credit card machines cropping up all over the place at grocery stores, pharmacies, and clothing stores. Chipped cards are part of a global standard called Europay, Mastercard, Visa (EMV), which approximately 80 countries now use.

The U.S. is currently in the process of transitioning to the EMV credit card standard. As of March 2016, 70% of consumers in the U.S. have a chipped credit card. This shift to EMV will continue throughout 2016 and 2017, however, it’s critical to transition as soon as possible as a retail business owner. Major credit cards such as Visa and Mastercard have declared that if a business isn’t compliant with EMV technology and their customer isn’t able to use their EMV chipped credit card on a transaction that results in fraud, then the business owner now has to pay for the fraudulent charges instead of the issuing bank or payment processor.

Fortunately, EMV technology reduces fraud. Chipped credit cards contain a small chip instead of a magnetic strip on the back and offer added security to each transaction because they’re hard to counterfeit. The computer chips on EMV credit cards create a unique code for every purchase. Fraudsters cannot use duplicate codes, even if they steal the transaction data.

Unlike EMV cards, magnetic cards contain unchanging data that can be replicated and used multiple times if compromised by a fraudster. According to CreditCards.com, chip-enabled merchants saw a 26% drop in counterfeit fraud in January 2016 versus January 2015, and MasterCard predicts this figure will increase to 39%. If you adopt EMV technology at your retail business, you’ll likely save money on fraudulent purchases.

Still don’t fully understand EMV chipped credit cards? You can check out this webinar the Small Business Administration recorded: EMV 101 What Small Businesses Need to Know About the Switch to Chip Card Technology.

Contactless NFC Payments & Mobile Wallets

Contactless payment terminals use near-field communication (NFC) to allow chipped credit cards and smartphones to communicate when they’re close together.

Buyers can either waive their EMV chipped credit cards or their smartphone with mobile wallet apps such as Apple Pay, Samsung Pay, PayPal, and Android Pay in front of a contactless payment terminal. To use a service such as Apple Pay, consumers store the card associated with their iTunes account purchases in their phone and when near a contactless terminal, use the Touch ID button to approve a transaction. With the addition of fingerprint technology, mobile wallets like Apple Pay are even more secure than EMV chipped cards.

The benefit of allowing contactless NFC payments at your retail business is that the amount of time spent on each transaction is reduced. Contactless payments are dramatically swifter than EMV card transactions. Imagine you have a long line of customers during the Christmas season or another peak time of your business. By shortening the time spent swiping, signing and entering pins, you’re able to move quicker through the line and provide your customers with better service when they’re feeling rushed and impatient.

Top credit card companies have conducted interesting studies about the benefit of contactless payments. A study administered by American Express found contactless transactions to be 63% faster than cash and 53% faster than using a traditional credit card, and according to MasterCard, patrons using contactless payments spend on average nearly 30% more than patrons not using contactless payments.

Creating a quicker, seamless checkout for your customers, which in return increases the likelihood that they’ll spend more, is a double win for any retail business owner. Take the time to evaluate your current POS system — what payment options can you add to ensure you’re maximizing the customers who can spend money at your store?

A great solution to upgrade your payment terminal is Square. Their reader accepts magstripe, EMV, and contactless payments, and it’s $49 with 2.75% per swipe. Other EMV card + contactless payments terminal options are available to purchase on Amazon.com for $150-500 and can be activated by your payment processor.