2016 has been a standout year for the payments industry, bringing in several new trends and solutions that have modernized and evolved payments. EMV technology has continued to expand, as the liability shift has forced merchants to upgrade their payment solutions, and mobile wallets have become more prevalent.
Growth of Mobile Wallets
Mobile payment acceptance has grown considerably the past few years, as consumers are now frequently using their smartphones to make purchases instead of with cash or card. By the end of 2015, all three major smartphone manufacturers had developed a mobile wallet - Apple Pay, Android Pay, and Samsung Pay.
Each of these three mobile wallet players keeps the financial information of consumers secure and safe by using tokenization. Instead of sending debit/credit card information to the merchant during a transaction, a one-time token is sent instead to the merchant’s terminal, protecting payment details through the entire payment process. This security feature helps make mobile wallets an ideal option to process a payment and differentiates mobile wallets from other forms of payments.
Increased Need for NFC
The growth of mobile wallets has also led to the increased need for terminals and payment hardware that accept Near-Field Communication (NFC). NFC the method of contactless communication and data exchange between electronic devices, such as tablets and smartphones, to other devices like credit card terminals. NFC is a valuable solution for both businesses and consumers, as it is the technology leveraged by mobile wallets, and is already being used at many vending machines and in-store payment terminals.
Processing a NFC payment is easy and quick, making it a preferred payment method. Consumers simply hold their smartphone over a contactless terminal and NFC communicates the data exchange from the smartphone directly to the terminal. NFC is undeniably changing the way consumers pay for transactions and will continue to evolve the way we pay.
Switch to EMV
EMV has been in full swing for several months already, yet many merchants’ still lack EMV-capable solutions. Although many merchants may not be looking to upgrade their terminals right now, it is vital for them to begin upgrading to EMV-compatible products sooner rather than later to avoid chargeback fees in an instance of fraud.
2016 will be a prime year where delayed merchants will make the switch to EMV technology, now that merchants are held fully responsible for instances of counterfeit fraud. At this time, merchants may feel it more worthwhile to go ahead this year and invest in an EMV terminal so their business stays up-to-date with modern technology and security.
PCI 3.2 Was Released
This past April, the Payment Card Industry Security Standards Council released the updated PCI DSS 3.2 version. This is the first update the PCI council has released since April 2015 and included new requirements and guidelines.
PCI DSS 3.2 is projected to help explain the deadline extension that was mandated last December for web protocol security. This updated version will include new regulations for retrieving the cardholder data environment, additional examination of service providers and their change management processes, and new Appendices within the DSS.
It is safe to say that 2016 thus far has been a very eventful year, as new and recent trends have continued to develop within the payments industry. Mobile wallets have expanded and become more prominent within digital payments and the need for NFC technology has equally become more prevalent. EMV will continue to be integrated within payments and those merchants who have avoided upgrading to EMV-capable solutions will begin investing in EMV products to safeguard their business. The latest release of the PCI 3.2 update has also helped enhance the payments spectrum by offering additional security compliances for further protection.