E-Payments’ Most Pressing Issues

As the year draws to a close, Digital Transactions has come up with the 10 Most Pressing Issues in E-Payments, and we were interested to see a few of our own hot-button issues making the list.

2020 has been such an interesting year, and it has thrown off all sorts of trends, predictions, prognostications, and plans that we think we should just count this one as a mulligan and start over again in 2021.

Here are four of Digital Transactions’ e-payments issues we’re most concerned about, and why.

1. Gas Stations Will Miss the EMV Deadline. Again.

Gas station pump handles. It looks like fuel merchants will miss their EMV compliance deadline. Again. This is one of the pressing e-payments issues we're concerned with

Gas stations were supposed to retrofit all of their pay-outside gas pumps and inside cash registers with EMV-compliant credit card readers. They were given an original deadline of October 2017, but that got pushed out twice to April 2021, thanks in part to the pandemic, and also because there’s such a high cost associated with the retrofits. It also hasn’t helped that gas station profits are down because we’ve all been driving less during the pandemic.

As of this past August, says Digital Transactions, “47% of major petroleum merchants surveyed remained unprepared to meet the deadline, and 20% were still in the planning stages for rolling out EMV, according to ACI Worldwide. Of the stations not in compliance, one-third are unlikely to meet the deadline.”

Another issue is that there aren’t enough technicians to install EMV readers at the pump. So if anyone is looking for a tech-related job, we may have a line on an opportunity for you.

2. Are Contactless Payments Here to Stay?

While 2020 jumpstarted contactless payments, Digital Transactions wonders if this is just a mere trend that will quickly fade away.

We don’t think so. As DT said, “issuers, card brands, and merchants have spent the last 15 years trying to get the three legs—consumers, merchants, and issuers—to line up to broadly adopt contactless payments.” Now that they have, it would be silly to shut it all off again.

For one thing, contactless payment is more secure, because it follows the 3DS2 security principle of “something you have, something you are, something you know; pick 2.” Paying with the NFC on a mobile phone wallet certainly matches that, since you have the mobile phone, and you are your fingerprint recognition.

We’re even seeing QR code payments make it to the U.S. They have been popular overseas, but they’re now being adopted by Square and PayPal, which is bringing QR code payments to more the CVS chain of drugstores.

3. Chargebacks Continue

Chargebacks are growing at a staggering rate this year, thanks to a number of issues. According to an Aite Group report this summer, chargebacks only equaled $585 million last year but could reach $1.05 billion by 2023.

They also said the cost of resolving a single chargeback was $25, which is why we always suggest merchants just give a refund to any disputed charge below $25. Anything higher, and it might be worth the fight.

Chargebacks will continue to grow because criminals are finding new ways to make purchases or make fraudulent returns. They’ll steal consumers’ data, launch account takeovers, and friendly fraudsters will continue to rip off small businesses that may seem too small to fight back, but too big to notice.

You can also reduce chargebacks by putting more information on cardholder statements, providing digital receipts, notifying subscription holders of upcoming charges, and using third-party tools that use artificial intelligence and other tools to fight friendly fraud.

4. Is Cash On Its Way Out?

Cash is being looked at with a dubious air, as cashiers accept our bills like we just handed them a dirty sock with an unknown history. Not to mention the coin shortage as the U.S. Mint has had pandemic-related staff reductions that created a bottleneck of coins.

The ATM industry is even concerned, responding to media reports of how long the virus can survive on paper and polymer banknotes. They called the media stories “fear-mongering” and found fault with the study. This is on top of the efforts already in place by some businesses to stop accepting cash, while cities ban businesses from going cashless.

Cash has always been nasty and dirty, but it’s only now that people are worried about the cleanliness of cash which is slowing down its usage. But it may not be the best outcome for the economy. As Digital Transactions said:

For all the advances in making digital payments easier and faster, cash remains a widely used and favored payment medium. Merchants, banks, and payment providers may well live to regret moves to discourage cash. Better to let the best payment method win on the merits.

Whether you want to protect your business from chargebacks, learn more about EMV compliance, or even use more touchless technology in accepting e-payments, CB Alert can help. To learn more, please visit the CB Alert website.

Photo credit: IADE-Michoko (Pixabay, Creative Commons 0)

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