Retail payment trends for 2015
April 15, 2015

The first quarter of 2015 is over, but there are many things happening in the credit card payment processing field. Many retailers have experienced sluggish sales in the first quarter, despite relatively strong economic growth, according to PYMNTS. The northeastern U.S. was hit by record snowfall this winter, keeping many people from visiting brick-and-mortar locations. Many of the other trends in the payments industry were related to data security.

In 2014, many retailers were targeted by data breaches so point-of-sale security became a much greater concern. Retailers will be making the EMV switch later in the year, and tokenization is becoming more important as well.

Tokenization
Tokenization is the security process that replaces sensitive transactional information, such as a 16-digit permanent account number or payment card details, with an identifier that has no value in itself Dark Reading reported. This system will work to guard transactions from being intercepted by cybercriminals. Since tokens do not contain a customer's payment details, retailers and online merchants can store them, especially for processing mobile payments. While tokenization may sound great in theory, many retailers are skeptical about how it will work in practice.

Mobile POS systems
As consumers continue to use mobile devices for nearly everything, this trend has put pressure on retailers to adopt mobile point of sale systems. According to Research and Markets, adoption of mobile payments technology will grow by 9.6 percent per year between 2014 and 2019. In addition, mobile POS is gaining a foothold in a larger variety of industries, including hospitality, retail, transportation and government.

These systems give retailers a way to offer an enhanced customer experience while simplifying how they accept payments. Mobile POS software also impacts how merchants are able to collect customer data.

EMV transition
The switch to EMV chip and PIN cards in October is weighing heavily on the minds of many retailers right now because of the costs of upgrading. Card issuers are already releasing new cards to customers ahead of the deadline. This trend will be one of the most significant for 2015 because it will require merchants to update their POS terminals or accept the liability from fraudulent transactions. EMV cards are expected to eliminate some instances of credit card fraud and protect both consumers and retailers from data security issues. Merchants will need to begin preparations for EMV implementation, if they haven't already started.

Nexus: G-WEBCD6