No longer optional: the payment types you need to accept today
With so many ways to pay today, it’s worth reviewing how payments have changed throughout history before considering what payment methods you should accept now. Thousands of years ago, bartering was a way of life and livestock were used as currency. In 1200 BC, societies in the Pacific Coast and Indian Ocean exchanged cowrie shells for goods. It wasn’t until 700 BC that gold and silver coins were introduced in China. Paper booknotes appeared around 806. And in 1900, the U.S. enacted the Gold Standard Act, which was originally introduced in Europe in 1816.
The first credit voucher was produced in the UK in 1880, and credit cards were introduced in the U.S. in the 1950s. The 1980s saw the emergence of the debit card, and the first gift card was created by Blockbuster in 1994. At one time, checks were second only to cash as the most used form of currency in the U.S. But the rise of credit and debit cards has bumped checks to second place.
Today’s payment options extend way beyond cash, check, credit, debit, and gift cards. Let’s take a look at three payment types you need to accept today to keep pace with consumer demand.
1. EMV chip cards for card present transactions
Although EMV chip card technology has proven effective at curbing card present fraud in the countries where it’s implemented, the U.S. is among the last country to adopt it. Now that the fraud chargeback liability shift has taken place, merchants that do not support EMV technology may be held responsible for certain types of payment fraud.
With nearly 80 percent of U.S. credit cards and 35 percent of debit cards already converted to EMV, the pressure is on for merchants to adopt this new payment technology. Consumers prefer chip cards over other payment methods– 61 percent of respondents to a recent Vantiv survey cite chip cards as their first payment choice. Three out of four respondents say they believe chip cards are more secure than traditional cards, and more than half agree the extra time needed for chip card transactions is worth the added security.
2. Payment aggregators for online transactions
These days, you would be hard pressed to find someone who has never made a purchase online. The modern-day consumer is comfortable shopping across all points of sale, and online is often the most convenient. In fact, eCommerce is expected to grow to as much as $480 billion by 2019.
One way to accept online payments is through a payment aggregator like PayPal. Aggregated accounts offer several advantages to merchants including simple setup. A recent Vantiv survey revealed that 42 percent of consumers prefer to pay for goods and services online using a digital payment method like PayPal. The benefits of using an online merchant account are numerous, and more and more consumers are opting for these types of digital payment methods.
3. Mobile payments for paying with a smartphone, tablet, or wearable device
The popularity of mobile payments has been driven in part by the fact that nearly 70 percent of adults in the U.S. own a smartphone and 45 percent own some form of tablet. Millennials and Gen Xers prefer mobile payments more than other segments of the population, and a majority cite speed of checkout as the primary benefit.
According to Vantiv research, 75 percent of mobile payment users would like to see the payment type accepted at more retail locations. More than half will select one retailer over another because of their ability to accept mobile payments. As greater numbers of consumers become comfortable using their smartphone as a wallet, accepting mobile payments will become more of a necessity for most businesses.
Payment types will continue to shift and evolve in response to consumer priorities, security concerns, and industry regulations. In order to ensure you are implementing the right payment solutions for your business, consult your trusted payment expert.