Consumers have high expectations for credit card payments, which means you should work with a credit card processor that helps you meet these standards. One requirement is a “fast, frictionless experience” that is also secure, according to 92% of the 7,000 North American and European consumers surveyed for an Ekata report.
After two years of delays, Visa and Mastercard both raised their interchange fees in 2022. These fees, which merchants pay, have become a more significant burden in recent years as the use of higher-fee rewards cards and the decline in cash usage have increased costs for merchants. While large merchants are expected to be most affected by these fee increases, Visa and Mastercard have implemented measures to reduce fees for small businesses with low annual sales volume and small transactions.
Those fees are becoming a significant burden for many businesses. Research from the Canadian Federation of Independent Business revealed that 78% of businesses believe their credit card processing fees have been unaffordable. We expect that small business owners who are shopping for credit card processing services will zero in on pricing and choose providers that can give them a reasonable rate both now and as their transaction volume increases.
Contactless and cashless payment methods are becoming increasingly popular. The events of the last few years have greatly influenced the economy and the way people make payments. According to PWC, global cashless payments are expected to nearly triple by 2030, and Grandview Research reports that contactless payments will grow 20% annually through the end of the decade. Business owners should expect increased demand for credit card processing as safety concerns and new technology continue to reduce cash-based transactions.
Services that allow consumers to pay for purchases in installments have also grown in popularity. So-called buy now, pay later (BNPL) has become a preferred payment method for a growing number of younger consumers. Notably, shoppers tend to spend more when going this route. We expect that cash-strapped consumers will continue to use this option.
In addition to a “fast, frictionless experience,” consumers expect their data to be secure. Although Visa found that EMV adoption has been highly effective in reducing incidents of card-present fraud, it is still rampant. According to Juniper Research, retailers will lose $130 billion to card-not-present fraud from 2018 through 2023.
Payment processing companies are projected to spend close to $10 billion through 2023 to detect and prevent fraud. In a TSYS blog, Scott Talbott, senior vice president of government affairs at the Electronic Transactions Association, wrote that “these tools are powered by technological advancements like machine learning, biometrics, geolocation tools and artificial intelligence. They are critically important in the fight against increasingly sophisticated criminals.”