Tag Archives: payments

Merchant Services and Payments Impacted by COVID19 [2023 Update]

The COVID-19 pandemic and the resulting stay-at-home orders across the globe and country during the past few months has led to a significant reduction in both the number of merchant services transactions and dollar sales in our country. With predictions of a global decline in GDP, there are few bright spots in the economic fallout. One concrete result of the pandemic is a move to touchless transactions in efforts to reduce the spread of the virus.

Cashless Society

COVID19 Pandemic Has Merchants Looking for Solutions

After the World Health Organization warned that banknotes may spread coronavirus, they recommended using contactless payments to mitigate the spread. Not to mention, microorganisms can transfer to credit cards at point-of-sale terminals during credit card processing, and PIN pads carry similar health risks. And because retailers had to shut down and sell online exclusively, the use of cash is disrupted due to the shutdown.

Global Scale

Depending on the spread of the virus, the public health response, and the effectiveness of the fiscal, monetary, and broader public response, the global GDP would potentially decline by 1.5% in 2020 after two to three months of economic lockdown in Europe and the United but would decline by 4.7% after a resurgence of the virus in China and continued spread in the United States and Europe.

A slowing global payment-revenue growth is expected to cost the payment industry $165 billion to $210 billion in 2020 revenue. The net interest-margin component, which is the source of 60% of payments revenues, accounts for 20% of the decline. The transaction component, which is the source of 40% of payments revenues, is responsible for 80% of the decline. A 1.5% economic contraction would lead to an 8-12% reduction in payment volumes.

Local Scale

Due to stay-at-home orders and the close of non-essential businesses, total transactions and dollar sales fell nearly 50% and more than 25% respectively in the weeks following shutdown orders. Active merchants dropped by 25% with more than a quarter of merchants posting no transactions at all. Urban areas showed sales decreasing by 22.5% since the first week of March while medium-sized cities have decreased 26.5%, small cities 26.5%, and rural areas 31.1%.

Despite the drop in card-present sales (nearly 50% drop in March), card-not-present sales only decreased by 15.2%. Sales for on-site technical services such as plumbing, heating, and contractors remains steady perhaps due to stay-at-home restrictions. Also sales between 5 am and 11 am are increasing, accounting for the special hours for seniors and high-risk shoppers, as well as for customers looking to shop outside of traditionally busy hours.

Host Merchant Services

During these turbulent economic times, depend on a stable and reliable payment processor to partner with your business to minimize the impact of worldwide instability. Payment processing should be the least of your concerns. Delivering personalized service and clarity, Host Merchant Services takes the time to explain your payment processing. We want you to understand your monthly statement, and we will ensure that your statement matches our promises during our sales presentation. If you do have questions, you can reach a live representative any time, any day. HMS offers wonderful customer service, as well as great rates.

Host Merchant Services even explains where our profit lies in the pricing structure to be fully transparent in all directions. Pricing fairness and transparency is our strategy in helping our customers find success with their businesses.

MasterCard Launches Global B2B Service

More than a year after announcing the launch of MasterCard Track, a B2B digital platform for improving global trade among small businesses, MasterCard has unveiled new plans to modernize business-to-business transactions even further. The new MasterCard Track Business Payment Service expands the focus of the digital platform for faster payments and data collection.

What Is MasterCard Track?

In 2018, MasterCard launched Track, a business-to-business platform to simplify and speed up global trade. The platform, powered by Microsoft Azure, connected buyers and suppliers with each other, lenders, and other networks.

Business-to-business transactions largely remain outdated despite rapid advancements in the rest of the business world. Manual invoicing and paper checks remain common with administrative costs nearing $500 billion. According to MasterCard, nearly 50% of all business-to-business transactions, or nearly $58 trillion, are still done on paper.

MasterCard Track partnered with nine procure-to-pay providers and business-to-business networks to help organizations maintain, exchange, and retrieve data about themselves and their partners. Track helps facilitate communication by connecting networks in a single platform.

What Is the Track Business Payment Service?

The Track Business Payment Service represents a new branch of the MasterCard Track platform that focuses on payments rather than networking and communication. The MasterCard Track Business Payment Service is the first commercial and global open-loop service built to automate business-to-business payments. The service modernizes payment processing by helping buyers and suppliers overcome outdated systems and improve the way businesses pay and get paid.

The Track Business Payment Service works as a single connection to combine multiple modern payment solutions with a focus on faster payments and real-time data collection.

All Payment Types in One Service

The Track Business Payment Service works as a single connection to combine multiple modern payment solutions with a focus on faster payments and real-time data collection.

Availability Begins in 2020

The MasterCard Track Business Payment Service is set to roll out across the world, beginning in the U.S. market in the first half of 2020. The service will be available to merchants and supplier partners who can incorporate it within existing products. Currently, the service is being piloted by partners including B2B payments optimizer Boost, payment solutions providers TSYS and CSI, Accounts Payable automation provider AvidXchange, and Accounts Receivable software providers HighRadius, YayPay, and VersaPay.

Frequently Asked Questions

What is Mastercard’s new global B2B service?

Mastercard’s new global B2B service is a suite of products and services that allows businesses to send and receive payments more efficiently and securely. Mastercard Track can be used by businesses of all sizes, in all industries, and all countries.

Who can use Mastercard’s new global B2B service?

Mastercard Track can be used by businesses of all sizes, in all industries, and all countries.

How does Mastercard’s new global B2B service work?

Mastercard Track works by using a network of banks and financial institutions to facilitate payments between businesses. This network allows businesses to send and receive payments quickly and securely, regardless of their location.

What are the benefits of using Mastercard’s new global B2B service?

There are many benefits to using Mastercard Track, including:u003cbru003e u003cbru003e● Faster payments: Mastercard Track can help businesses send and receive payments up to 24 hours faster than traditional methods.u003cbru003e● Increased security: Mastercard Track uses the latest security technology to protect payments from fraud and theft.u003cbru003e● Reduced costs: Mastercard Track can help businesses reduce the costs associated with sending and receiving payments.u003cbru003e● Improved cash flow: Mastercard Track can help businesses improve their cash flow by making it easier to track and manage payments.

Who can use Mastercard Track Business Payment Service?

Mastercard Track Business Payment Service can be used by businesses of all sizes, in all industries, and all countries.u003cbru003e u003cbru003eHere are some additional details about Mastercard Track Business Payment Service:u003cbru003e u003cbru003e● Mastercard Track Business Payment Service allows businesses to send and receive payments using virtual cards. Virtual cards are one-time-use cards that are created for each payment. This helps to reduce fraud and improve security.u003cbru003e● Mastercard Track Business Payment Service is available through a network of banks and financial institutions.u003cbru003e● To get started with Mastercard Track Business Payment Service, you will need to contact your bank or financial institution.

Generation Z Prefers Cashless

Generation Z represents a whopping 32% of the world’s population. As the first “digital native” generation that has never lived without the internet and technology, Gen Z sets itself apart in many ways. When it comes to the world of payments, Gen Z has very different expectations than even millennials and overwhelmingly prefers cashless payments — although with much higher standards for design, convenience, and security than other generations.

How Popular Are Digital Payments?

According to a U.S. Mobile App Report from 2017, 70% of consumers in Gen Z have made app-based mobile payments in the last year, surpassing all other generations. A more recent survey by BillTrust found that 79% of Gen Z responders use a digital payment service at least once every month.

Generation Z Is Price Sensitive

Generation Z, and young millennials too, are much more concerned with price than older adults, and much less likely to show any brand loyalty. As many as 80% of participants said that price was the most important factor to them when making a purchase.

Having grown up during the Great Recession of the late 2000s and early 2010s, many Generation Zers watched their parents struggle, which has led to something of a more frugal and pragmatic attitude. This more price sensitive attitude plays into the strengths of the financial tech companies as they can offer services at a low cost.

Generation Z Cares More About Security

Surveys have also found that Generation Z cares strongly about security, with as many as 33% of respondents to one survey claiming that they would stop dealing with a company immediately were their data breached. On top of this, 67% of surveyed Gen Zers would adopt name brand products when they need to seek assurance that their standards will be met.

Gen Zers hold privacy, ethics, and security seriously and demand transparency when it comes to cashless payments.

Generation Z Isn’t Tolerant of Friction

Having grown up in a world that’s fully accepted digital technology, Generation Z is completely at home with digital and real-life experiences coexisting. Because of this, studies have found that they will expect things to run smoothly, and they will be less tolerant than others when things don’t. With the rise of mobile payments, this plays into this generation’s hands and provides them with a system they’re perhaps more comfortable with.

A clunky user experience or an overly complicated system could be enough to lose this generation as a customer. After years of technological revolution and refinement, this is a generation that expects the best.

What Generation Z Is Looking for in Credit Card Processing

It would seem that what is most important to Generation Z when it comes to payments is a seamless, frictionless experience that fits easily around their lifestyles. This means customized credit card processing and payment solutions, transparency, security, and convenience. Having instant, seamless payments is of huge importance, especially when looking to win their loyalty and trust.

The next platform that caters to Generation Z will likely combine all forms of financial services in one from digital payments and banking to investments and loans to further capture the interest of this digital generation.

You can review the variety of services Host Merchant Services offers here.

Bitcoin: The Hidden Danger to Your Business

Bitcoins (BTC) are a growing new form of digital currency created in 2009 by Satoshi Nakamoto, who envisioned them as a peer-to-peer, electronic cash system. His goal was to create a decentralized currency, not backed by any central bank or country, therefore allowing the free market and determine the worth and pricing of the bitcoins. New bitcoins are “mined” electronically and the rate of creation is halved every four years until the total number of coins reaches 21 million.

There are a few reasons why businesses should stay away from accepting bitcoins as a form of payment for goods or services. The first is their extremely volatile exchange rate. The value of a single BTC rose steadily from 2009 to early 2013. In April 2013 the value was nearly $270 per bitcoin. Shortly after reaching this peak value the currency plunged in value to around $50 per BTC. While the value did rise again in the following months, it stabilized around $100 in value. The threat here to the business is that while there is a real value behind this currency, it fluctuates more rapidly than the rate of the USD. This can expose the business to losses if the value drops suddenly.

Another reason that business owners should not accept bitcoins is the exposure the company can suffer as it pertains to business intelligence. One point that supporters promote is the anonymity of transactions while using BTC. While this is true for the most part, determined individuals can associate real-life identities with the unique addresses assigned to Bitcoin wallets. All BTC transactions are recorded in a public ledger. Therefore, any company or individual that makes a payment to a company has their unique wallet number and can use it to track future transactions.

The threat to businesses from this is their future transactional data is public record. Information such as supply chain details, spending habits, and financial data could become available to competition. This knowledge can be analyzed to take away competitive advantages and undermine market share of your business.

Bitcoins can also be the target of theft. Because of their electronic nature and being stored on either a personal computer or mobile device they are subject to hackers trying to gain access to your digital wallet. Over the last few years, there have been incidents where over USD $8 million have been accessed and removed by hackers from exchanges.

Finally there are concerns that federal regulators could step in and enforce responsibility of companies to ensure that customer’s personal data remains private. The Federal Trade Commission (FTC) has been assessing the privacy of customers that use bitcoins to pay for goods or services from businesses and how security practices may need to be updated in light of new financial products.

When you boil down all these facts about the exposure a business experiences when dealing with this new currency, the risks greatly outweigh the rewards. Merchants should evaluate what level of risk they are willing to be subject to before diving into this market that is still in its infancy. Host Merchant Services can provide secure and reliable payment processing at a low cost to your bottom line. Contact one of our payment experts today at 877-517-4678 for a no obligation evaluation of how we can help your business.