October Is Around The Corner, But What About EMV?

EMV, a supposedly more secure method of payment has been receiving much criticism in the past months and isn’t exactly being accepted with open arms. So October is around the corner, but what about EMV?

A recent survey conducted by Gfk Public Affairs shows that the major shift from mag-stripe to EMV has much farther lengths to go before the Oct. 2015 deadline. The survey shed light on possible reasons why this shift will take longer than expected. According to Finextra, only about 10 percent of all people surveyed have received a chip-enabled debit or credit card from their bank.

What About EMV That Is Important In October?

However, it seems as though it is not just the consumers that aren’t exactly prepared for October. According to the latest Wells Fargo/Gallup Small Business survey, just about half of SMB owners weren’t even aware that there would be a liability shift coming Oct. 1. Also, out of the small businesses surveyed only 31 percent of businesses that accept credit cards had a payment processing device capable of accepting the chip cards. With a little less than half of business owners blaming the hesitation to switch on the high cost of upgrading, it’s become highly competitive for merchant services to get businesses upgraded at a low cost to the merchant.

It seems as though a shift in liability for the merchant would be enough reason to make the switch. Avoiding liability for fraudulent charges when someone uses a counterfeit card seems like a safe measure that businesses would want to take. After last year the U.S. was held home to $3.89 billion in losses due to counterfeiting, but even that substantial loss isn’t enough reason for the 21 percent of SMB owners that never plan to switch to EMV.

It’s almost an even split on whether or not the American population actually believes EMV will actually reduce fraud. However, it is a common concern for a majority of Americans to have high or extreme concern for their personal information when shopping in-store and online.

Whether your business is up-to-date with EMV chip readers already, or you plan to upgrade in the future EMV will be the future of all credit card processing. One will probably not see the widespread use and acceptance of EMV cards by the expected date, Oct. 1. It is clear that people have their doubts about the change in the way cards a processed and some are simply just not informed. The best thing you can do for your business is get informed and find out when the best time to switch to more secure processing is.

Feel free to make the switch today with Host Merchant Services. As always we offer free equipment including the latest in EMV card readers so you can provide the safest credit card processing for your customers.

What is EMV?

EMV, an acronym, for Europay, Mastercard, and Visa represents the efforts of these three companies in developing a standard for credit card processing. The main purpose of EMV is to enhance the security of credit and debit card transactions by incorporating a microchip into the cards. This microchip generates a code for each transaction, unlike magnetic stripe cards that store and transmit static cardholder data. By doing EMV makes it more challenging for criminals to use stolen card information.

The introduction of EMV technology primarily aims to combat card fraud at point-of-sale terminals. When an EMV card is used at a chip-enabled terminal the microchip interacts with the terminal to create a transaction code often referred to as a “token” or “cryptogram.” This code varies for every transaction providing a layer of security compared to the fixed data stored on stripe cards.

EMV technology has gained traction across regions worldwide and has proven effective in reducing certain forms of credit card fraud. Apart from its security features numerous countries have adopted EMV as their standard, for card payments to align with global security standards.

Benefits Of Using EMV

EMV technology, which stands for Europay, Mastercard, and Visa has advantages that primarily focus on enhancing the security of credit and debit card transactions. Here are some key benefits of utilizing EMV;

Decreased Counterfeit Fraud: With EMV cards each transaction generates a code making it challenging for criminals to create cards. This significantly reduces the risk of fraud, at point-of-sale terminals.
Authentication: The chip embedded in EMV cards provides authentication meaning that each transaction is assigned a unique code. This offers enhanced security compared to magnetic stripe cards that rely on data remaining the same for every transaction.
Heightened Security for Card-Present Transactions: EMV technology is particularly effective in securing in-person or card present transactions. The chip technology adds a layer of protection beyond the stripe, which can be easily copied or cloned.
Compatibility: EMV has become a standard simplifying card usage for travelers internationally. Numerous countries have. Are in the process of adopting EMV technology ensuring a secure payment experience worldwide.
Liability Shift: In regions where EMV implementation has taken place there is often a shift, in liability associated with card fraud.
If a merchant has not upgraded their terminals to comply with EMV standards they may be held responsible, for types of transactions that could have been prevented if they had chip technology.
Enhanced Methods to Verify Cardholders: EMV offers ways to verify cardholders, including the use of a Personal Identification Number (PIN) which adds a layer of authentication for card users.
Promotes Contactless and Mobile Payments: EMV technology often supports contactless payments allowing users to simply tap their cards or use devices for transactions. This provides convenience for consumers while maintaining the security features of EMV.
Reduces the Risk of Skimming: EMV cards are less vulnerable to skimming a technique used by criminals to capture information from stripes. Since the chip generates codes even if someone intercepts the card data it cannot be easily replicated for transactions.

While EMV technology significantly enhances the security of in-person card transactions it is important to note that it primarily focuses on scenarios where the physical card is present. Online transactions, where the physical card is not used directly may still require security measures, like Secure authentication.

Cards, Monitoring Systems And The Modern Fleet

The way fleets are monitored and the systems used to monitor them are ever-changing. Fleet programs put in place to monitor fleet expenses, and track fuel purchasing and pricing are being adopted by businesses around the globe. A recent MarketsandMarkets study estimates the market for fleet management systems will grow to a colossal $35 billion by 2019, this is more than a $20 billion increase from its current value. This increase in the need for fleet management systems could be a result of CO2 emission control becoming a norm and rising fuel costs. However, the main driving force for these systems remains to be overall smarter and more efficient business practices for the merchants and businesses using them.

The way these fleet systems function is actually quite simple. Merchants implement the card reading technology into their current system of processing. The merchant is then able to accept fleet cards as a form of credit while being established as part of a network of merchants accepting these cards. Businesses that use fleet cards also have a telematics system in place which is then used to track and monitor just about every piece of data they need to monitor their fleet. This helps managers track costs, negotiate pricing and lower fleet overhead by eliminating paper-based reimbursement processes.

At the point of sale, drivers simply enter their specified I.D. number or the transaction cannot be completed. This adds a higher level of security for both the merchant and the business manager.

A recent report from Fleetmatics, a fleet management solution company elaborated on the astonishing effect of telematics. According to Fleetbeat a decrease in fuel consumption by 573 million gallons per year has been attributed to the integration of telematics and fleet programs.

When it comes to acquiring data, the commercial fleet and trucking industries have an advantage over other sectors. Fleets are already equipped with the high-tech telematics hardware and other M2M communications which come standard for many fleets. The challenge isn’t collecting data but making sense of it while truly using it to its highest level.

The use of fleet cards and monitoring systems is ideal for any merchant or businesses. Industry Associations, fuel merchants, and other transportation-focused businesses take advantage of fleet card programs to enhance their service offering to existing clients and attract new fleets and more capital.

Paypal And eBay Officially Split

The highly anticipated split between two companies that seemed forever conjoined happened earlier this week, Paypal and eBay went their separate ways. EBay, who announced the divorce late last year hopes to extend and revitalize their business after leaving Paypal, who was responsible for a whopping 43 percent of all eBay’s Revenue last year. In the last week of the companies being a single entity Paypal was just about half of all eBay’s total reported revenues. It’s this split that emphasizes Paypal’s true value as a worldwide online payment system, previously concealed by online shopping giant, eBay.

The company that was purchased by eBay in 2002 for $1.5 billion is now worth 33 times more since its last IPO. This comes at no surprise considering Paypal has handled over $1 trillion with help from its 169 million users.

This weeks’ break is great news for the company, more freedom and the ability to acquire other companies is now what Paypal has its site on. The financial giant is ready to report quarterly earnings again and gain shareholders by the truckloads. With only small local companies such as Alipay and Stripe to compete with, investor’s palms have been itching at an opportunity to jump on board.

However, the enormously monumental change in Paypal’s future hasn’t come without discord. John Donahoe, eBay’s CEO who opposed the split announced that he is to withdraw from the company following the spinoff. As part of eBay’s restructuring towards a more configured company it has said it would cut 2400 positions, which would deplete its global workforce by nearly 7 percent.

Luckily for Paypal, 74 percent of the largest U.S. online retailer’s sites, and nearly 70 percent of those across Europe, the Middle East and Africa already use the company. With Paypal now running on 67% of top mobile apps it is clear that PayPal has a significant lead in getting their button to appear on lots of merchant checkout pages across the Web.

The future for both companies is not guaranteed but most seem to be that Paypal will be better off in the long run while eBay struggles to find a distinctive strategy that will drive revenues and profit, which isn’t hard to imagine in such an increasingly growing and competitive space.

Sally Beauty Supply Target of Credit Card Data Breach

For the second time in a week, a major retailer has reported a data breach that may affect thousands of customers. This time, the target is Sally Beauty Supply, the largest seller of beauty products in the world. So far, the breadth and severity of the security breach are not known, but Chris Brickman – president and CEO – confirmed that the company was investigating the illegal intrusion and pledged to work with any customer who had been affected.
This incident highlights ongoing security problems within the merchant services industry. Over the past several years, as computer hackers have become more sophisticated, such data breaches have seemingly occurred with regularity. In response to this problem, the industry has attempted to adopt several important mobile payments standards. In fewer than six months, retailers such as Sally Beauty Supply will be required to improve their point-of-sale systems so that they can accept so-called “chip-based” credit and debit cards.

This regulation stems from the actions of EMV (“EuroPay, MasterCard, and Visa”), a global consortium that sets the standard for authentication measures used to verify credit and debit card transactions. EMV – which includes every major global card issuer – has set an October deadline for merchants to accept integrated circuit cards (or simply “chip cards”) at their places of sale. This change comes with several security benefits. Under the old “swipe and sign” model, making fraudulent charges was relatively easy; all that was necessary to make an unauthorized charge was to swipe the card and provide a forged signature. Simple sixteen digit account numbers are easy to steal and reproduce. The use of chip cards combats this practice in two ways. First, it makes it nearly impossible to reproduce fraudulent cards. Second, it assigns a unique identification number to every transaction, which makes it easier to track suspected fraudulent usage.

However, full adoption is unlikely to occur by October, both because not all consumers own chip-based cards and because some retailers lack the capacity to process these cards. For merchants, failure to comply with these standards comes with a real price. Most card issuers have announced dates for “liability shifts,” which signify that retailers – not banks, as was usually the case – will be responsible for reimbursing customers for any fraudulent transactions if the retailer lacks the technology to handle a chip-based charge.

The Sally Beauty data breach underscores the need for immediate change. In the coming years, the merchant services industry will have to continue to evolve to ensure that mobile payments are secure. While the move towards chip-based cards will not solve all problems, its full implementation would go a long way. The sooner, the better.

Starbucks Data Breach Puts Bank Accounts At Risk

For many consumers, Starbucks coffee has become an essential part of their morning commute. They take a quick detour on their way to work, pay with their credit card or smartphone, and get back on their way, ready to take on the day. But recently, some customers have been reporting an unwanted addition to their morning routine: unauthorized charges on their debit and credit cards stemming from the Starbucks app.

The recent data breach goes like this. Hackers gain access to an unsuspecting customer’s account in some way. They then use the app’s ‘auto-reload’ function to top off as many as a dozen new Starbucks’ pre-paid cards. Finally, they ‘gift’ these cards to themselves, presumably to sell on the black market.While this lack of security has left many customers irate, Starbucks itself has denied that the data breach comes from an internal problem with their app. Instead, they claim, the problem has a much simpler explanation: weak passwords. Oftentimes, hackers will ‘spam’ a company’s automated login systems with a multitude of passwords, hoping that at least a few work. Other times, hackers get their hands on the login credentials of thousands of customers of another company – say, a bank – and use that to attempt to log in to apps like Starbucks’ payment app.This is where customers can ensure their own security by employing certain practices. Merchant services and mobile payments experts suggest that customers use strong passwords. For example, don’t use a password that is easily associated with the application that you are using. The password for your Starbucks app probably shouldn’t be ‘frappucino.’ Secondly, don’t use the same password across different accounts. It’s bad enough if hackers get your password to one account. This problem is compounded if they can use this info to hack all of your accounts. Lastly, change your passwords frequently. Experts also agree that until the Starbucks breach is completely resolved, it is wise to turn off the ‘auto-reload’ feature in the app.

While the Starbucks breach isn’t disastrous in and of itself, it does signify some of the problems that lay ahead in the merchant services industry. As consumers demand quicker and easier mobile payments, how will their security be ensured? Certain practices, such as sending a confirmation text message to a person’s cell phone when an account has been accessed from a new device, seem like common sense and could have helped to prevent the Starbucks data breach. Will consumers embrace these policies, or will they view them as needless annoyances? Time will tell.

EMV is Coming – Does it Spell the End of the Swipe?

The Advent of EMV and What It Means for You —

EMV stands for Europay, Mastercard and Visa. It is a system which incorporates technology that will standardize the means by which credit and debit cards (collectively “chip cards”) will communicate with card readers and provide a way for customers to buy products from the widest possible variety of merchants and merchant services.Current card readers rely on the ability to read a “magstripe” or magnetic strip affixed to the back of each credit card and debit card. Stored in this magnetic memory is the information necessary to verify the identity of the account associated with the purchase.The current merchant services system is inherently insecure, however. Since the information on the magnetic stripe can be easily read by any card reader hardware, it can be read by anyone with such hardware, even someone who is not processing a sale.

The new EMV system depends on a combination of a chip built into each card and a means of digitally “signing” each transaction to ensure that even if the data from one transaction is available to someone who is trying to gain unauthorized access to the account, that data is not usable for a second transaction, as that second purchase will have its own digital “identity.” These capabilities are built into EMV readers.

This is all accomplished through the use of strong cryptography and independent verification of the card and account credentials at the point of purchase by the chip card and the EMV reader. In theory, the system will either make it impossible or extremely difficult for an unauthorized third party to make a purchase without authorization from the account holder.

Three of the major U.S. card providers have implemented plans for a roll-out of new EMV compatible systems beginning in October of 2015. The United States is the only G20 nation that has not committed to EMV as a standardized means of processing card-based payments, even though there are over 23 million EMV readers deployed so far.

Ironically enough, it may be contact-less payment systems that drive the adoption of systems like EMV. Mobile payment and contact-less payment options are growing in both availability and popularity. Since these systems can independently verify authorization for transactions and further, can modify their authorization systems, they will provide good competition for future EMV innovation and adoption rates.

Best Buy and Apple Pay Could Spell Trouble for MCX

One of the most significant skirmishes in the ongoing battle over mobile payments supremacy involves a major American electronics retailer, an iconic tech brand and an industry giant. According to a recent report published by the Wall Street Journal, Best Buy could be the next major retail chain to accept Apple Pay in the United States.

Apple Pay is an advanced electronic payments system that can transform an iPhone 6 or iPhone 6 Plus into a mobile wallet. The iPhone, along with its various accessories and peripherals, is a major selling item at Best Buy; for this reason, the move to accept Apple Pay seems like a smart decision. However, such a move will impact the store’s current relationship with Merchant Customer Exchange (MCX).

Best Buy currently uses MCX as its preferred system for mobile payments. MCX utilizes its own mobile wallet system, called CurrentC, which is proprietary. Best Buy is not the first major MCX client to accept Apple Pay; the iconic CVS and Rite Aid drugstore chains in the U.S. have also made the iPhone their favorite mobile wallet.

At this time, Best Buy is not completely switching over to Apple Pay; in fact, they can only use it through a combination of the store’s mobile app and their iPhone. Shoppers are currently free to use CurrentC and other mobile payments they may see fit to use when they purchase electronics. However, MCX is naturally concerned about the upcoming expiration of its exclusive agreement with Best Buy. Moreover, MCX is worried about the future of its proprietary electronic payments platform; after all, Best Buy is already planning on making the required modifications and upgrades to its cashier register network.

It stands to reason that MCX, a coalition of American providers of merchant services, should be worried about Apple Pay. MCX was organized for the purpose of joining strengths and efforts against the likes of Apple Pay, Google Wallet, PayPal, et al. To this effect, MCX applied its business acumen to secure exclusive contracts such as with Best Buy; alas, iPhone users seem to be warming up to Apple Pay in greater numbers.

It is unlikely that MCX will abandon the CurrentC platform or else give up without a fight. Innovation seems to be key in the mobile payments industry, and thus this is something that MCX should consider when the time comes to head back to the drawing board.

HMS to provide recovery services for claimants in Visa/MasterCard class-action lawsuit

In 2005, a class-action lawsuit was filed against Visa and MasterCard by claimants who argued that the two credit/debit card providers were colluding in price fixing and anti-competitive practices. The case was settled in 2013, and the card companies agreed to provide compensations totaling $6.05 billion, reduced by 25% to account for exemptions and exclusions, to merchants who accepted Visa or MasterCard payments in the United States between January 1, 2004 and November 28, 2012. Claimants may receive $6,000 per $1 million in Visa or MasterCard transactions processed during this period.

Your business could qualify for compensation from this fund. If you believe you are entitled to compensation, or would like to find out more about compensation and filing, Host Merchant Services is ready to get you started.

How do I qualify for funds?

To qualify for compensation from the $6.05 billion settlement fund, your business must have accepted transactions from Visa or MasterCard credit or debit cards at any point between January 1, 2004 and November 28, 2012. The settlement fund covers only transactions processed in the United States during the described time period.

If your business meets this requirement, then you are eligible to file for a claim using HMS’s easy filing service. Once filed, claims are reviewed by settlement administrators, who process your application and determine the compensation your business is due.

What will HMS do for me?

We at HMS want our clients to receive the full compensation to which they are entitled. We understand that claim filing can be an arduous process, and that business owners sometimes elect not to file because of the investment of time and resources it requires. Therefore, HMS is proud to announce that it will help facilitate the claim filing process on behalf of your business. We will provide recovery services to clients, and we will work to ensure you are fairly compensated.

You only need to provide your business information to get the filing process started. The forms are straightforward and easy to use, and you will be contacted if more information is required. The initial filing process takes only minutes, yet it can earn your business anywhere from thousands to millions. You will receive updates about the status of your claim as it progresses through settlement administration.

What will this pay? Do I have to pay anything?

The settlement will allow claimants to recover $6,000 per $1 million in Visa or MasterCard credit or debit card payments processed between January 1, 2004 and November 28, 2012. Claimants must file to receive funds; no funds will be paid to your business unless you apply for them. A standard legal fee will be charged at the time of claims payment – you will not be charged until you receive your money. In the event that your claim is denied, you will be charged nothing for the filing or processing services. There are no initial fees or hidden charges. Our system is zero risk for your business.

How do I get started?

HMS will be accepting clients for Visa/MasterCard compensation claims soon. Look for updates in the near future; we will provide more information as we finalize our system. At that time, interested clients can sign up for claim filing through HMS.

If you are interested in filing a claim through HMS’s recovery services, please complete the form below.

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BLE and the power of the individual in the mass market [2023 Update]

The story of retail has largely been a story of a shift in focus from individual customers to the mass economy, but there’s a push to take everything back to the personal level. Recent studies about consumer preferences indicate that consumers are more receptive to personalized shopping experiences and services. If you can make the customer feel valued, then you can earn his or her business for years to come. BLE can change the customer experience and bring a revolutionary change in the mass market.

The individual’s wants and needs

Consumers are entitled to what they want. That’s the perspective that drives the economy. If a consumer has a want, he or she finds a business that can fulfill that want in a satisfactory manner.

Studies are demonstrating that what consumers want is a personal experience tailored to their other wants. One of the draws to retail websites like Amazon.com is those sites’ ability to track consumer history and offer targeted suggestions. The 2013 Online Personal Experience study released by Janrain concluded that 74% of respondents reported being frustrated by websites that provided advertisements and notifications irrelevant to their personal interests. Additionally, 57% of respondents indicated that they would provide information to a website if they thought that information would be used in a way that benefited them.

These findings, and others, indicate that consumers are willing to allow data usage in order to improve the customer experience. Too much data usage, and irresponsible data usage, are still major concerns for businesses, especially given the rise in major data breaches exposed since 2013. However, using a limited amount of data to provide a much more personal shopping experience is something retailers should be pursuing.

What data is relevant?

Consumers provide a lot of opportunities for data analysis. With the popularity of online shopping, retailers have access to purchase history, products viewed or searched for, wishlists and bookmarks, shipping addresses, billing information, and favorite product categories. Any given set of data can tell you something about a consumer.

In a physical store, information such as consumer routes, loiter time in each department, aisles visited, and purchase history are all relevant to the consumer experience. However, this data has proven difficult to measure on a meaningful scale, at least until recently.

BLE and an opportunity for data collection

Bluetooth Low Energy has made quite a splash in the retail industry because of its power to provide data to both the consumer and the retailer. In simplified terms, BLE-enabled business models use BLE emitters called “beacons” to transmit Bluetooth signals across an area of about 200 feet. These signals can be detected by smartphones. If a consumer’s smartphone has the retailer’s app, the consumer can receive push notifications containing offers and information based on their current location within the store.

BLE is more suitable for these data collection and message-pushing purposes than Wi-Fi or cellular signals, which are blocked by or experience interference with walls and other structural elements. In a BLE-enabled data model, retail apps use beacon signals to determine what messages a customer sees, and retailers can associate different beacons with different content depending on that beacon’s physical location in the store. The beacons themselves don’t transmit anything except a unique Bluetooth signal, so everything from location association (based only on signal strength, and calculated by the app itself) to message selection and delivery is handled by the app.

How can BLE personalize the customer experience?

We’ve covered this topic in some depth in another article, but to summarize: BLE enables retailers to add online functionality into the in-store experience. BLE-enabled apps can be programmed to deliver different messages, offers, and suggestions based not only on a consumer’s current location but also on his or her previous locations.

Additionally, apps can integrate online shopping features such as account sign-in, purchase history, and wishlists. With this data available, apps can then compare in-store inventory to previous purchases and wishlist items to offer very targeted selections.

There’s even some talk of enabling apps to ring for a sales or customer service associate to be dispatched to the user’s location within the store. This kind of functionality would help maximize convenience for the customer and facilitate an omnichannel retail strategy.

All of this would also translate well into support for a loyalty program. Apps would provide users with a persistent means of tracking and managing their rewards and progress. Reminders about upcoming or available rewards are likely to keep customers coming back.

Where do we go from here?

For now, the industry needs to test the waters and see exactly where BLE can carry it. Various retailers are testing BLE in certain applications such as in-line ordering and contactless payment. There are definite challenges for retailers, but overcoming or sidestepping these challenges will open up new possibilities.

How do consumers feel about mobile wallets?

It’s a big question in the payments industry right now. In an earlier article, we discussed how the U.S.’s eventual transition to EMV could accelerate the rise of the mobile wallet as a payment medium. But we also discussed some of the problems, and there are many problems.

First things first: are mobile wallets safe?

One of the primary concerns amongst consumers is whether or not mobile wallets are a safe form of payment. According to the 2014 Digital Wallet Usage Study by Thrive Analytics, “Security concerns remain the main barrier to adoption.” These results closely follow from those of Accenture’s Consumer Mobile Payments Survey.

The concern is legitimized by media coverage of major recent data breaches and smartphone malware incidents. Consumers need to be reassured that their data is safe, and they want to take the least risk necessary when making payments or providing account information. Traditional credit card transactions, although unsecure compared to EMV transactions, may appeal to consumers because they don’t appear to expose any information. The challenge for mobile-capable merchants and for mobile wallet providers certainly lies in reassuring consumers that mobile wallets are safe in general, and much safer compared to traditional magnetic stripe card payments.

What about competition?

Many retailers are interested in creating their own proprietary mobile wallet applications, but this may impact the way consumers perceive mobile wallet technology as a whole. Ron Herman, CEO of Sionic Mobile, expressed his concerns about consumer “overload” in the app store: to the average consumer, it may be very difficult to differentiate between the countless applications already available. In a sense, the market may inadvertently be training them to look for the name on the application rather than what the application provides. This is bad news in an industry that is ultimately focused on driving spend by improving the consumer experience.

Companies should be focused on offering a complete package to consumers. Many would-be mobile wallet users are looking for incentives to try mobile wallet payments; headaches and confusion are only likely to turn them away from this payment medium.

What about mobile wallet acceptance?

Another major hurdle for mobile wallet providers is the slow uptake of mobile compatibility amongst U.S. merchants. The problem is cyclical: merchants don’t view mobile wallets as a major player in the payments ecosystem, so they are hesitant to enable mobile compatibility (if they even have it); consumers then see that many merchants are still not mobile-compatible, so they are hesitant to begin using mobile wallets.

If left to continue, this vicious cycle will prevent mobile wallets from reaching their potential as a payment medium. What can be done to solve this problem? A few things.

First, mobile wallet providers need to emphasize to consumers that mobile wallet technology is secure and worth pursuing. It’s best to address the market’s primary concerns, and data security is a hot-button issue nowadays. Accenture’s findings indicate that consumers are much more likely to continue using mobile wallets if they make at least one payment through a mobile wallet application. To get that far, though, consumers need to be reassured that they are protected from the risk of exposure (and from the risk of fraud).

Second, mobile wallet providers need to emphasize to merchants that mobile wallet technology is becoming more prolific and is therefore worth supporting. The main concern amongst merchants is that mobile wallets don’t represent a significant portion of payments, and that the technology is therefore not worth pursuing. In fact, mobile wallets present promising opportunities for merchants, especially given the trend toward a cashless or less cash dependent consumer base. EMV compliance could be used as a selling point here; EMV technology supports mobile wallets, so the push to establish EMV compliance in the U.S. could be presented as an opportunity for merchants to support mobile wallet transactions.

What do consumers want to see?

The vast majority of market research tells us a few things about consumers’ wants and expectations when it comes to mobile wallet technology.

First, consumers want to know that their data is being protected. Security is consistently at or near the top of mobile wallet survey results; consumers need to feel confident that the technology they use is safe to use.

Second, consumers want to know that their payment methods will be accepted at a range of merchants. Consumers are less persuaded — and even dissuaded — by limited applications. If they can’t be sure that mobile wallet technology, or a certain mobile wallet app, will give them greater freedom, they won’t be willing to add it to their payment arsenal.

Furthermore, incentivization drives mobile wallet use. Part of the draw of mobile wallet technology is the potential to integrate customer rewards programs and promotional campaigns into a system that already handles payments and many other non-commercial activities. The convenience of bringing together the payment and customer service utilities is a significant contributor to existing mobile wallet usage, and it stands to reason that further developing and emphasizing these features is one of the keys to increasing mobile wallet usage and customer spending.

What can we expect to see?

There are a lot of forces at work here. Nobody can be absolutely certain about what will happen with mobile wallet technology down the line, but it’s clear that consumers are hesitant to make the transition from cash and cards to app-based payments. What we hope to see is a rise in emphasis on the consumer: the mobile wallet should empower consumers by facilitating convenient and simple payments and supporting incentivization. So long as consumers are concerned about mobile wallet security or confused by what’s being offered, they’ll cling to what they know.

Interested in accepting mobile wallet payments?

Host Merchant Services offers EMV solutions for business owners. If you’re interested in getting a head start on the rest of the U.S. market, contact an HMS sales representative today and ask about our EMV-compliant equipment and processing options.

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