Credit Card Industry Trends to Eye in 2016
The credit and debit card industry — and the entire payment processing sector, for that matter — is an evolving field. Let’s look forward to some potential changes and trends for 2016 that will be deserving of your attention.
There are certain things that over the long haul, stay relatively similar. The fly swatter’s design hasn’t changed much in decades and probably won’t anytime soon. Neither has toilet paper, for that matter…well, at least according to George Costanza, but not Elaine and Jerry.
But if we’re talking about anything related to computers, telecommunications, or technology in general, you can bet your bottom dollar that it will change — and rather rapidly, at that. The world of credit and debit card transactions and how they are processed is no different. With that in mind, let’s examine a few topics and trends that are bound to be noteworthy in the cards processing industry for 2016.
More Mobile Payments
There’s no denying that we are using our mobile devices and smartphones at an ever increasing rate. In fact, the most popular website in the world, Google, announced that for the first time ever, 2015 saw more searches coming from mobile devices than desktop computers and laptops.
These miracle devices are with us wherever we go, so it makes sense that we as consumers would opt to streamline as much as we can onto them. That includes using them as payment methods, and thanks to Near Field Communication (NFC) technology utilized by Apple Pay, Google Wallet, Samsung Pay, and others, it’s never been easier.
Although the adoption rate of NFC payment technology hasn’t been quite as exponential as some were predicting, it will still be worth being able to offer the option to your customers in 2016. Apple and the other players in this space aren’t going anywhere anytime soon.
More Innovative Rewards Systems
One of the biggest incentives to customers using cards over cash are rewards system. Even a modest 1% cash back on all purchases is better than nothing, but now that rewards systems are expected, companies are competing over who can offer the most appealing paybacks. American Express Blue Cash Preferred is offering an impressive 6% cash back on groceries currently, in addition to 3% cash back on gas and select stores.
But beyond cash back (or airline miles, which are by far the two most popular forms of rewards), look for card issuers to get more creative with the type of rewards they offer. There may be a points system which allows you to accrue points based on dollars spent to redeem for real-life items or travel, or they may be as simple as offering extra cash back on online purchases for those that rely heavily on e-commerce.
More Small Businesses than Ever to Accept Cards
This is less of a “trend” per se and more of the inevitable progress of change. As we’ve covered before on our blog, the costs of not accepting credit or debit cards at your small business far outweigh any possible fees or surcharges you may incur from accepting them.
As recently as 2013, approximately two thirds of all point-of-sales (POS) transactions were done with some type of plastic card — either debit, credit, or pre-paid gift. And according to Community Merchants USA, nearly 70% of customers aged 18–34 will only shop at businesses that offer multiple payment options.
There are still some straggling holdouts who are cash-only operations, but moving into 2016 and beyond, they will become much more of a rarity.
More Cashless and Checkless Operations
Dovetailing into our previous point, the amount of businesses that will swing toward the other end of the spectrum and not accept cash or check at all will continue to grow. Many companies both small and large have already made the switch — Southwest Airlines, for example, has been completely cashless since 2008.
The benefits of accepting cards along with cash are clear and well-known — increased likelihood of impulse purchases, making your business more appealing to millennials and younger people, etc. But what are the benefits of going 100% cashless?
For one, you will almost guarantee a faster checkout rate. Depending on your type of business and the volume you see on a daily basis, that can more than make up for any potential lost customers who are insistent upon paying with cash or check. You also make your bookkeeping a bit easier, as every transaction is quickly, electronically, and automatically accounted for. And although it’s a small thing, your register and POS transaction area will be much cleaner when you consider that the average dollar bill has literally thousands of types of bacteria on it.
Want to ensure your business is as future proof as possible? Get the latest card reading equipment and processing from Valued Merchant Services. And if you’re using somebody else for your processing needs, consider this — we guarantee that we can reduce your fees for debit and credit cards, or we will give you $500.
Originally published at blog.valuedmerchants.com on January 8, 2016.