Recap of 2016 Payment Processing Events That Changed the Industry
Milestones like slow EMV transition and same-day ACH made 2016 a surprising and active year in payment processing. Looking back over those and other big events will get you up to date on the industry’s challenges and successes.
Buying necessities and paying bills are everyday occurrences for consumers. Thanks to steady momentum over recent years, we’re on the way toward digital transactions becoming mainstream. According to a 2016 survey, 80 percent of finance and treasury professionals handle select staff compensation, benefit, or reimbursement payments with cards.
Some 70 percent report their companies’ chances of converting most transactions from traditional paper checks to modern electronic forms are somewhat to very likely before 2020. Over half (51 percent) of respondents recognize cost cutting as an electronic payment benefit. Typical organizations receive 44 percent of business-to-business (B2B) remittances as checks, compared to 2013’s 50 percent.
Trust E-Complish’s secure array of transaction solutions to fulfil all of your patrons’ bill pay needs. Pick vital services like electronic billing, online payments, and mobile shopping. Our systems expedite everything from old-school standards to the latest advancements. Some even combine both. To avoid snail mail delays and increase cash flow, try Direct Check to accept checks by phone. Your dependable custom-built platform comes without setup charges and maintenance fees. Assessing just a percentage of each amount minimizes transparent costs.
Slow EMV Transition
The shift in October of 2015 from card issuer to merchant Europay, MasterCard, Visa (EMV) liability was chaotic. Despite underperforming on speed, the transition has been fairly smooth. Most Americans have accepted chip cards positively for increasing credit card payment safety. Counterfeit fraud expenses for U.S. retail stores that have adopted this change or are near completion dropped 54 percent.
Just 33 percent of merchants’ terminals can process chip payments. Visa believes reaching the anticipated 90-percent level will take four to five more years. With chargebacks continuing after switching the fraud burden, Visa and MasterCard delayed their Oct. 1 activation date for Automated Fuel Dispenser (AFD) EMV from 2017 to 2020 for the domestic U.S.
America’s biggest generation ever, millennial teenagers through 30-somethings born between 1981 and 2000, represent over 84 million consumers. Their expectations differ radically from all previous peer groups. The 2007-08 financial crisis led the educated throng to distrust traditional banks.
Young people don’t write checks and prefer online and app shopping to in-store visits. This tech-connected demographic wants real-time mobile banking, easy access to transaction platform choices, digital services like smartphone payments, and fee transparency. So empower them to pay bills conveniently with just a few quick taps via MobilePay.
Daily Automated Clearing House (ACH) payments reached 79 million in 2016. The network was processing almost $40 trillion annually within 24-48 hour typical timeframes.
Last Sept. 23, the ACH launched two new windows to settle same-day transactions. It handled about $5 billion ranging mostly from B2B remittances to emergency employee compensations during its initial 30 days. A survey found that 57 percent of companies anticipate using this service to pay urgent bills, and 38 percent view it as a last-minute payroll solution.
Prompt same-day clearings improve customer experiences while increasing cash flow. Healthcare industry advantages include depositing insurance claim reimbursements into patient accounts in real time on appointment and procedure days. Currently, just credit amounts under $25,000 are eligible for expedited services. Next Sept. 15, the ACH will speed processing for consumers paying bills with debit cards. March 16, 2018, is the deadline for all financial institutions to make credit funds covering same-day transactions available by the end of each day.
Two years ago, 2015 ranked among the worst times for data breaches. Unfortunately, cyber invasions continued in 2016. Hackers compromised Cisco, Dropbox, the IRS, the Justice Department, LinkedIn, Snapchat, U.C. Berkeley, Wendy’s, and Yahoo. Such incidents show that retailers, payment processors, and consumers must stay vigilant and prioritize security to avert data infiltration disasters. All E-Complish systems feature stringent safeguards.
Emerging markets and developing countries are striving to become cashless societies. Sweden has made progress. African, Asian, and South American locales are seeing mobile payments grow with more affordable technology. In December 2016, one month after India’s rupee currency crisis, one digital wallet’s 10 million first-time users boosted its customer base to hit 160 million. Support the cashless movement by offering internet and smartphone transaction solutions.