2014, the year of ice bucket challenges, Flappy Bird, and the Frozen phenomenon has come to a close and the New Year is here. Not only are there several deadlines in place for merchants this year regarding payment processing and security, but exciting new technology is beginning to separate the market. Plus, after the amount of payment cards compromised this year grew 38%, there’s never been a better time for businesses to rethink their processing and security practices.
Along with your personal resolutions this year, why not make some as a merchant? Below are our top five payments resolutions for 2015.
1. Achieve PCI-compliance–for good.
Get that credit card data out of your systems! To be truly PCI compliant, sensitive data should not be touching your workstations, and it certainly should not be stored. One of the best ways to do this is with point-to-point encryption (P2PE), a process recommended for all merchants by the PCI Council. When you accept cards using P2PE, the card data is encrypted at the point of interaction. This means that unencrypted data never touches your system, making PCI compliance a much easier task. Want to be as iron-clad as possible? Combining P2PE and tokenization is a great way to lock down your sensitive data and keep it out of the hands of cybercriminals.
Remember, the deadline for PCI 3.0 compliance was January 1st, 2015–here’s what you need to know.
2. Get EMV-ready
The EMV deadline is approaching fast, and it can never hurt to be ahead of the game. Especially since some major banks have already begun distributing chip-enabled cards. The technology was implemented in Europe over 20 years ago, and now that it’s moving to the United States, merchants are rushing to prepare. By October of this year, all merchants must be equipped with EMV-ready terminals.
While we believe EMV is a necessary and important step in the right direction, it is by no means a silver-bullet to credit card fraud. Payment security will take a lot more than a single solution to perfect, and it’s important that merchants remain vigilant in protecting their card data.
3. Stay educated
These days, the payments industry is evolving quickly along with other technology. Keeping abreast of what’s new can take a little work, but it can be worth it in the long run. For example, you’ve probably heard of Apple Pay, but do you know how it works? It’s compatible with both Bluetooth Low Energy (BLE) and Near-Field Communications (NFC) technology, both delivering unique customer experiences. BLE allows customers to pay from anywhere within the store using their smart phone, while NFC requires being closer to the payment terminal. Combined with technology like Touch ID, it has the potential to really change the in-store shopping experience.
The best way to stay up to date on new payments technology is by reading publications like Digital Transactions and PYMNTS.com. Tradeshows like Money 20/20 are also the perfect place to learn about the latest and greatest in the payments industry.
4. Ditch flat-rate processing
Flat-rate pricing is tempting, we completely get it. It’s an easy to understand thing in a difficult to grasp industry. Payment processing is complicated, but that’s all the more reason that pricing should be more intricate.
All transactions incur three fees:
1. A fee to the issuing bank, e.g., Chase (interchange)
2. A fee to the card brand, e.g., MasterCard or Visa (assessment)
3. A fee to the credit card processor
The assessment is a fixed cost, but interchange varies greatly. Flat-rate pricing has to be such to cover for all interchange scenarios, and can cost merchants up to 20% more than they need to be paying.
Interchange-plus pricing aims to optimize costs for merchants by carefully monitoring basis points and pricing accordingly. This way, merchants are never charged more than they need to be for interchange, and it gives them more control. Learn more about interchange-plus pricing here.
5. Crack down on chargebacks
Cutting costs is always a good thing, and for the most part chargebacks (and their related fees) are an avoidable one. Chargebacks occur a few ways. One is when a customer is unhappy with a product or service and requests a refund from their bank. These chargebacks can generally be avoided with excellent customer service and good communication with customers. Another reason chargebacks occur is when customers suspect fraud. These are a bit harder to avoid, but can be well worth the effort in the long run.
Check out this guide on how to avoid all types of chargebacks, from customer dissatisfaction to fraud.