The credit card processing industry has undergone a significant transformation over the past few years with the integration of new technology.
Advancements in mobile payments, e-commerce, and online banking have encouraged merchants and consumers alike to adapt how they accept credit card payments. In return, they’ve benefitted from faster, more secure and efficient payment processing.
In this article, we’ll explore the latest developments in the credit card processing space for businesses, including pros and cons, and how to choose the right credit card processor for your small business.
Examples of Tech in the Credit Card Processing Space
The credit card processing space has seen significant changes in recent years with the advent of new technologies.
Here are some examples of technologies that have transformed the credit card processing space:
- Mobile Payment Processing: With the rise of mobile devices, mobile payment processing has become increasingly popular. This technology enables merchants to accept payments from customers using their mobile phones.
- EMV Chip Technology: EMV chip technology is a more secure way of processing credit card payments. It replaces the old magnetic stripe technology and provides enhanced security features such as dynamic authentication.
- Contactless Payment Technology: Contactless payment technology enables customers to make payments by simply tapping their cards or mobile devices on a payment terminal. This technology became popular during the COVID-19 pandemic due to its touchless nature and has continued to be used since.
Benefits of Tech in the Credit Card Processing Space
The use of innovative technology in credit card processing has several benefits for businesses. Here are some of the key benefits:
- Increased Security: Technology such as EMV chip technology provides enhanced security features that make it more difficult for fraudsters to steal credit card information. With cybersecurity a greater concern than ever before, EMV technology can help stand up against the billions of dollars stolen each year through fraud and other money scams.
- Improved Efficiency: Mobile payment processing and contactless payment technology make the payment process faster and more convenient for both merchants and customers. This is true for both brick-and-mortar and online transactions.
- Better Customer Experience: The use of technology in credit card processing enables businesses to provide a better customer experience by offering more convenient payment options. Business owners are freed up to experiment with new and more individualized payment options, such as dual pricing, as a result.
Potential Drawbacks of Tech in the Credit Card Processing Space
While the use of technology in credit card processing has many benefits, there are also potential drawbacks to consider. Here are some of the key drawbacks:
- High Cost: Implementing new credit card processing technologies can be expensive, especially for small businesses. Companies looking to integrate need to find a merchant processor willing to work with their business or one that fits their business model long-term.
- Dependence on Technology: Businesses that rely heavily on technology for credit card processing may be vulnerable to outages or technical issues. With some technology still in its infancy stages, there could be some hiccups over the next couple years while bugs get worked out. Still, the technology only stands to improve each day that it’s used.
How to Choose the Best Credit Card Technology for Your Business
So, you’re thinking about upgrading? When choosing credit card processing technology for your business, there are several factors to consider.
Here are some key considerations:
- Security: Look for technologies that provide enhanced security features to protect your customers' credit card information. Don’t just opt for the cheapest agreement with your processor—ensure you are protected.
- Cost: Consider the cost of implementing new technologies and whether they are affordable for your business. Find a company that’s willing to work with you and meet you where you’re at. Don’t feel pressured to agree to terms that don’t make sense.
- Customer Preferences: Consider the payment options your customers prefer and choose technologies that support those options. For example, if your customers need contactless payment to keep the line moving because you run a fast-paced business, make sure that’s worked into your agreement.
The use of technology in the credit card processing space has transformed the way businesses accept payments.
While there are benefits to using new technologies, businesses must also be aware of the potential drawbacks. Ultimately, they will get worked out over the next few years and the technology will continue to become more affordable. But switching now could be a boon for your business and set you apart from the competition, so you need to weigh that when deciding the best time to switch.
Contact us today to learn more about our payment processing options.