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Real-Time Payments Network approved! What Is It?
DOJ Approves Creation Of Real-Time Payments Network
The DOJ has approved a real-time payment network suggested by two dozen banks who want to provide faster payments to merchants using their merchant services. The DOJ wanted to make sure that this was not a move that would consolidate too much power in too few places and that there is no risk involved with the program. With the new real-time payments system, purchases and funds can be available immediately. This announcement is sending waves through the payment processing community as service providers rush to offer real-time payments.
In a statement that it released in late September, the DOJ stated that it felt that the payment processing system proposed by the banks may actually have a pro-competition impact on the market. They also noted that the system would help to repair and rebuild an aging payments infrastructure that is long overdo for some upgrades, and it’s about time.
Merchants are happy to hear about the real-time payments network as it means that they can have funds available quicker than they otherwise would have. Customers should be happy as well. The new system allows for the instant transfer of money between banks with instant recognition and status updates. That means if you need to transfer money from one bank to another, hit send and boom – it’s there. No more waiting for charges or payments to clear, it all happens instantly.
Yes, there are great implications for merchants and customers a like but when will it be ready? Banks and payment gateways are racing to get on board with the new payments network. Banks at both ends of the network (sending and receiving) for any given transaction must be setup for the new system for it to work. It is estimated that half of all payments will be over the real-time payment network by the end of 2018. You will start seeing it sooner, though. As more banks and gateways get on board you will notice more and more funding between banks happening instantly.
To me, the worst part of our financial infrastructure is the wait time on certain payments. I would think, “why in our modern world does it take 2 days for a debit card payment to process, or 3 days for a transaction to post”. The constant battle of keeping up with what is “processing” or “not posted” yet got me into trouble with my bank accounts more than once. Maybe finally we won’t have to worry so much about processing times and delays. For a merchant it means you won’t ever have to write a check that isn’t funded until the next day ever again. You will have funds from the same day available and ready for use – and that’s music to my ears.
Online sales boom, Walmart Expects 40% Increase
Walmart is Betting on Stronger Online Sales for 2018
In preparation for its annual investor’s conference, retail giant Walmart hinted at a future when the company would be a strong competitor to Amazon, the absolute global leader in online sales and ecommerce operations.
Investors reacted very positively to the news, including a projection by Brett Briggs, Walmart’s Chief Financial Officer, who believes the company will see an increase of 40 percent in online sales over the next two years. By the end of the press conference, Walmart’s stock had gained 4.5 amidst heavy trading.
Ecommerce has thus far been a hit-and-miss affair for Walmart, the most recognized American brand in discount retail stores. The retail chain made a series of investments in digital assets around 2009 and 2010, but they did not work out as expected because they needed further development. At one point, Walmart was leading in online sales of digital music, particularly in the country and western genres; however, the company fell short of getting into the streaming revolution.
Now that the company intends to increase its ecommerce footprint in the next two years, some analysts are concerned about Walmart’s announcement as it relates to brick-and-mortar stores in the U.S. In 2018, the company will only expand by 10 Supercenters and 15 neighborhood stores; this is effectively a 50 percent reduction compared to the current pace of expansion.
Walmart has a clear advantage in terms of its large network of stores around the country; as the company continues to expand its e-commerce offerings, customers can pick up their orders at a store near their homes, schools or jobs. This added convenience is something that Amazon had considered when it evaluated the acquisition of gourmet supermarket chain Whole Foods earlier this year.
The Arkansas-based company has also announced that it is working with Google and its smart home automation division to develop voice apps for the Google Home smart speaker. The search engine giant has been slow to catch up to Amazon, the current leader of the smart speaker segment. While Google was more concerned about making its Home speaker a control center for smart appliances, Amazon expanded the online shopping functionality of its Echo speaker. Now that owners of Google Home devices are able to order Walmart items with by means of voice commands, the e-commerce world is going to get more interesting and competitive.
European Countries Trend Towards Cashless Societies [2023 Update]
In the United States and other countries around the Americas, “Cash Only” signs can still be found in many retail establishments; however, the opposite situation can be observed in Sweden, a country where hundreds of bank branches no longer accept or store cash deposits.
Sweden is on track to becoming the first truly cashless society, and other nations in Europe are also moving towards a future where electronic transactions enabled by payment processing networks are the preferred monetary settlement methods.
No Cash? No Problem in Europe
In 2016, a market research study conducted by payment processing giant Visa showed the extent of cashless electronic transactions in Sweden, where consumers are three times more likely to use debit cards or their smartphones to pay for anything from snacks to groceries and from rent to concert tickets. What is interesting about Sweden is that this is a country where consumer credit is nowhere near as popular as it is in the U.S. Swedish people simply love paying with debit cards and smartphones; they have simply fallen out of love with their national currency, the kronor.
Another European country that seems to be headed towards a cashless future is Greece, and this is surprising due to the restrictions on money transfers imposed by the government during the financial crisis of 2015. Over a period of two years, Greek consumers did not trust electronic transactions because they were handled by the banks they had grown to mistrust; by 2017, however, people in Greece had become tired of handling cash. These days, bank account holders in Greece demand services such as mobile transfers and smartphone wallets that they can link to their banks.
In April 2017, Dutch banking giant ING surveyed 15,000 European account holders to gauge their feelings about using cash in the 21st century. Not surprisingly, one out of every three survey respondents indicated their desire to stop using cash altogether; in fact, many respondents stated that they think payment processing networks are advanced enough to handle 100 percent of all transactions.
Final Words
What is interesting about the ING survey is that countries such as Italy, Turkey and Poland are where people feel the strongest towards a cashless future. These happen to be the nations with the highest incidence of money laundering and corruption, which may explain why their citizens feel that doing away with cash will improve the current situation by removing temptation and forcing greater transparency.
Retail isn’t Dying, it’s Evolving
The Retail Industry is Far from Dead
For all the talk about how e-commerce has advanced to the point that online shopping has obliterated the brick-and-mortar experience, the evidence cited in this regard is tenuous at best. Those who believe that e-commerce will make shopping mall disappear will often mention the meteoric rise of Amazon and the fact that Cyber Monday creates more revenue than Black Friday; the problem with these assumptions is that they do not take into account what is really taking place at the retail level.
In recent weeks, tech giant Apple has unveiled some very interesting expansion plans for its Apple Stores, which have been crucial for the company’s massive success since 2010. Apple wants to offer more than just gadgets and repairs at its stores; the company plans to hold town hall meetings, give programming classes and even partner with café brands, perhaps Starbucks. Apple’s new location will have a large aesthetically pleasing courtyard with trees that shade you from the interior lighting. The goal is to become a location where people want to gather. The products and services will be viewed a secondary reason for being there.
Speaking of Starbucks, the company is once again considering expanding its menu with craft beers, select wines and gourmet foods. Again, becoming a location for not just coffee drinkers to hang out at. Even Nordstrom is talking about opening locations on the west coast that won’t sell clothes – instead they’ll focus on spa and beauty services in a, you guessed it, fun environment to hang out with the girls.
Urban Outfitters, the trendy clothing store for the Millennial generation, recently acquired a gourmet pizza chain. It is clear that Urban Outfitters intends to provide a shopping experience that may include offering pizza and Italian delicacies to customers. It is also important to note that the clothing chain’s young customers are less likely to pay with cash; which is why they are expanding to accept EMV and NFC so they can pay with everything from Apple Pay to debit cards. The Millennial generation leverages electronic payments more than any other market segment, and thus it makes sense for Urban Outfitters to upgrade its merchant services.
It is clear that the American retail industry is in a transitional period that is shifting to meet the desires of the Millennial generation. Companies are creating concept locations that are supposed to be a fun hangout spot rather than the place to buy a smart phone or a cup of coffee. This business model seems logical. Give the younger adults a place where they can congregate, and they will inevitably spend money on whatever is around. The top 10 retailers in the U.S. are department and discount store chains; Amazon is the only e-commerce giant in this club, and even Amazon is getting into the brick-and-mortar world with its recent purchase of Whole Foods.
Retail is here to stay. It definitely won’t be the same retail that we grew up with, it will be better. It’s possible that the old retail shopping was, on a whole, so un-enjoyable and non-aesthetically pleasing that it pushed people to e-commerce. If retail does evolve to give the shopper an exceptional experience, e-commerce might just take a hit. The fact that giants like Apple and Amazon focusing on physical locations means retail has huge opportunities that merchants can capitalize on. I for one am excited. So, here’s to the future of retail. A new retail that will pull you away from your computer and make you want to shop in reality again.
Virtual Reality is Shaping Retail and E-commerce… Re-commerce?
What Virtual Reality Means for Merchants and Retailers
The video game industry has already made the most out of augmented reality and virtual reality, two advanced technologies that were originally developed for military applications; has the time arrived for the retail and e-commerce sectors to embrace them?
Augmented and virtual reality technologies, respectively known as AR and VR, are indeed making inroads in the retail sector, and their future is very promising. Long before the wildly popular AR mobile game Pokemon Go made its debut, footwear brand Converse was already using The Sampler, an interesting AR app that allowed shoppers to use their smartphone cameras for the purpose of seeing how a pair of sneakers would fit them before heading to the store. In the case of VR, IKEA and Lowe’s have both introduced virtual experiences for shoppers who can don headsets for the purpose of decorating their home interiors; this is a classic example of VR being used to drive store traffic and add excitement to the retail shopping experience.
Heartland Payments Charging $299 EMV Non-Acceptance Fee
EMV cards have been in a talking point for the last couple of years. In 2015 card companies started switching over to EMV “chip” cards. Two years later we’ve all seen these cards, and probably have at least one by now. The chip side of an EMV card gets inserted into a credit card machine ensuring a more secure transfer. This is due to the fact that fraudsters can recreate magnetic stripes but not EMV chips, therefore making them harder to steal and use. Now that merchants have had two years to switch to EMV capable credit card machines, many merchant services providers including Heartland Payments will start implementing EMV non-acceptance fees.
EMV Non-Acceptance fees
In November Heartland Payments, one of the largest merchant services providers in the US, will start charging $299 EMV non-acceptance fees to it’s customers who do not yet accept EMV payments. This may not seem like a big issue – just get a new credit card machine, right? Wrong. Many merchants have point of sale systems that they have put tens of thousands of dollars into that do not accept EMV chip cards. That leaves the merchant with a large bill to upgrade their point of sale system that they may have just purchased and are most likely still in a contract for. The other options are A) adding on an EMV pin pad to the existing point of sale system which may cost hundreds of dollars and will remove integrated payment processing from the point of sale system or B) pay the EMV non-acceptance fee. Unfortunately, paying the fee may be the cheapest option besides the fact that you will be forced to upgrade to EMV at some point.
Why are merchant services providers charging EMV non-acceptance fees?
Well, it depends on how you look at it. The banks are saying it’s an incentive to switch over to EMV because EMV is safer for both the merchant and the customer. Others see it as a money grab – just another fee that merchant services providers can charge for.
It does make sense that EMV payment processing is safer, but it doesn’t make sense that the shift to EMV should cost merchants hundreds to tens of thousands of dollars. Many merchants don’t even have a need for the upgrade for example; if they are already keying in transactions on a non EMV capable terminal, or are low risk of counterfeit and fraud such as charities or religious organizations. Such companies shouldn’t be charged for EMV non-acceptance.
As for those who do need the upgrade, payment processing and merchant services companies should provide compliant hardware without cost to the customer. Here’s the good news; the non-acceptance fee isn’t mandatory in the industry. Some payment processing companies are making sure their customers are taken care of free of charge.
Can I get out of paying?
Yes. Merchants can easily switch their payment processing to a company, like Host Merchant Services, that will not charge you an EMV non-acceptance fee. You will probably end up with a better rate and spending less overall by making a switch. Even if a merchant has a point of sale system with another company, the payment processing can most likely be switched to another service provider that won’t charge an EMV fee. If you don’t know if your payment processing company is going to charge you, give them a call and find out. Many companies hide EMV compliance fees in their contracts and you might not know until it’s too late.
Are EMV compliance and PCI compliance the same thing?
No.
PCI compliance has to do with secure processing of cards, not accepting EMV. For example, using tokenization rather than storing customer data in your system has to do with PCI compliance. EMV compliance is just having the ability to accept a chip card using a credit card machine that accepts EMV chip cards.
How is Host Merchant Services handling EMV compliance?
Good business practices.
Host Merchant Services values their customers and make sure that all of them are EMV compliant at no cost. If they have a point of sale system that can’t accept EMV, Host Merchant Services will find a solution. Merchants are never charged hidden fees and we don’t try to get extra money from our customers. In fact we have a lowest cost guarantee. We will match or beat any company or you get $100.
Host Merchant Services also offer Bonsai point of Sale systems, all of which accept electronic payments including EMV, NFC, Apple Pay, Android Pay and PayPal.
Stocks and Bitcoin Battle for Millennials’ Investing Dollars
Though the high-profit potential of Bitcoin and other cryptocurrencies offers irresistible bait to that powerful under-36 demographic we call millennials, it’s not time to write the stock market obituary just yet. Popular stock market apps have made online trading of stodgy old Wall Street firms seem cool and new again. The truth is that this generation has shown an affinity for cryptocurrencies and the stock market that will likely drive digital trading trends for the foreseeable future.
Millennials Love Stocks
Even though Bitcoin and other kinds of digital currency are the sexy new beast of today’s trading world, only an insane analyst would think that the stock market will assume a secondary position of importance any time soon. As long as actual business drives the world’s economic engine, stocks will stay popular with millennials traders. They have stood the test of time, which appeals to any investor who chooses a balanced approach. Stock apps are popular with young traders because it’s free and plugs them directly into the trading space without fees or commissions of any sort. For this self-directed generation, the trade-off in fewer research or tools is an easy one to make.
And Millennials Love Cryptocurrencies Too
Bitcoin and its brethren have a few things going for them when it comes to popularity with the under-36 crowd. First of all, it’s new, techie, and the latest shiny object. This generation, the first to spend their lives in an internet and smartphone world, automatically love it. Digital currency is only nine years old as an industry, but the past few years have seen the potential for incredible returns the like of which we haven’t seen since the dot-com boom and bust of the late 1990’s.
The Bottom Line
Regardless of the generation, smart investing still equals smart investing, and though the particular assets might change, tried and true principles remain the same. Expect millennials to continue their stock-investing ways for the majority of the portfolio, with a much smaller percentage dedicated to holding cryptocurrencies. It’s the same theory as that implemented by previous generations who loaded up on proven stocks but reserved a portion of their money to take chances on small companies with bright prospects. One thing is certain. Millennials have taken over the reins and will steer the direction of trading trends for the time being. You can bet that will include both stocks and digital currencies.
Whole Foods Data Breach [2023 Update]
Whole Foods has been in the news lately due to its recent acquisition by Amazon, which brought about in-store discounts for Amazon Prime members. Unfortunately, not everything is peachy at Whole Foods: in late September, the grocery outlet suffered a large-scale data breach, in which several of its point-of-sale systems in their taprooms and full table-service restaurants lost customers’ private information to hackers in an invasion of their payment processing system.
Redefining Whole Foods with Cloud Retailing
Despite their acquisition by Amazon, Whole Foods assured their customers in a press release on September 28th that Whole Foods systems are not connected to Amazon’s, and that customers’ purchases and payment information at Amazon were not in jeopardy. They also stressed that the credit card processing systems used on their main checkout terminals were not breached.
In an attempt to further secure their merchant services, Whole Foods announced that they had begun an investigation through a cyber security forensics firm, and had also reported the breach to law enforcement. Interestingly enough, neither Whole Foods nor Amazon suffered a significant hit in after hours trading.
Gizmodo reported that as many as 117 venues could have been impacted by the breach—and yet Whole Foods has been alarmingly silent about the exact nature and extent of the breach. They declined to reveal when they first discovered the breach, or how many customers may have been affected by it. In the wake of the devastating Equifax scandal in which millions of Americans’ private information was stolen, transparency following a data breach is more important than ever, and Whole Foods’ tight-lipped response—or lack thereof—is troubling.
Final Words
Whether or not you were affected by this specific flub, it’s always important to keep in mind that this sort of thing can happen anywhere you shop, and it’s imperative that you know how to protect yourself in the event of a leak or attack. You should always monitor your accounts and ensure that no fraudulent purchases have been made without your knowledge, especially if you’re information might have been breached by hackers. If they have, immediately contact your financial institution to cancel the card and refute those charges.
Was I affected by the Equifax data breach? How do I protect myself?
Data Breach after Data Breach
The chaos of the Equifax data breach has left nearly every American feeling violated and confused. Hackers stole Social Security Numbers, birthdates, addresses, driver’s license numbers, and credit card numbers. Now they can use this information to rack up charges, open new accounts, steal benefit checks, and more.
Secure payment processing through merchant services can limit fraud, but mainly protects information being transferred not information stored in computer systems. The liability in this case stands with Equifax. You need to take action ,if you haven’t already, to find out if you were affected and take action to protect yourself.
Did the Hackers Get Your Info?
Equifax lost the trust of 143 million Americans, or about half the country. Are hackers targeting your identity right now? To find out, you must register at EquifaxSecurity2017.com. Equifax will assess the risk of identity fraud and suggest your next steps.
Six Ways to Protect Yourself:
The Equifax data breach is just one of several recent incidents. The merchant services industry relies on upgrades and patches to keep technology up to date. When organizations fall behind on security and compliance, consumers lose out.
While you can’t get your personal information back, you can take action to guard yourself. Here are some extra layers of protection:
- Register at EquifaxSecurity2017.com. The data breach gives you free credit monitoring for one year.
- Freeze your credit reports. Contact Equifax, TransUnion, and Experian to stop scammers from opening new accounts in your name. You can lift the freeze at any time.
- Place a flag on your driver’s license. The Department of Motor Vehicles can watch for suspicious activity.
- File your taxes early in 2018. If the hackers have your Social Security Number, they may try to claim your tax refund before you can.
- Check your statements regularly. Report unauthorized transactions to your lender or credit card company.
- Download your free credit reports each year. AnnualCreditReport.com gives you access to credit history from the three major reporting bureaus.