As a business owner, you need to stay updated on the latest in-person and online payment processing trends. Otherwise, the competition will leave you behind. Remember that the payment processing industry evolves at a breakneck pace. Statistics even show that 40% of all POS transactions now consist of credit card payments.
Are you struggling to find a good starting point in exploring payment systems? Don’t worry—we’re here to help! If you want to gain an advantage over your competitors, start exploring the upcoming processing trends before they turn mainstream. That way, you’re already utilizing the newest systems while your competitors haven’t even adjusted yet.
What Are the Upcoming Trends in Payment Processing?
The payment processing industry has evolved significantly in the past decades. Modern eCommerce platforms allow even local shops to accept customers halfway across the globe. Furthermore, consumers now have dozens of alternatives to in-person cash payments—from prepaid cards to mobile wallets.
Modern POS advancements reshaped market shopping demands. Customers nowadays only patronize stores that carry a broad range of payment options. Reports even indicate that 58% of SMBs get asked about their card and mobile payments every day. If your business fails to keep up with the most widely used payment options, you might get left behind.
Some upcoming payment processing trends to watch out for include the following:
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Fraudulent transactions pose the most significant risks in processing electronic payments. Processors generally avoid businesses prone to fraud payments. The criteria vary on a case-by-case basis, but most high-risk merchants deal with pornographic material, forex, crypto, tobacco, or CBD products.
Fortunately, you can mitigate the threats by working with high-risk processors. These institutions have several fraud-preventing systems in place specifically designed for at-risk merchants. Some popular options include Durango, Payment Cloud, and Soar Payments.
If you don’t accept mobile payments yet, now might be a good time to expand. While card payments remain the number one payment method in the country, mobile wallets are quickly gaining popularity as well. Surveys suggest that more than 64 million individuals have used proximity-based payments apps in the past year.
Slow payment gateways, tedious forms, and lagging checkout pages all increase the risks of cart abandonment. Trust us—digital natives have a short attention span. If you have slow-loading popups that take two or three seconds longer to load, site visitors will likely turn to your brand competitors.
To minimize shopping cart abandonment and bounce rates, streamline your shop’s checkout process with frictionless technology. These systems track payment details so that customers can make repeat purchases without having to fill out the time-consuming forms on checkout pages. Apart from attracting new customers, frictionless systems also encourage repeat purchases.
Overreliance on modern payment processing systems carries several cybersecurity risks—e.g., data breaches. Many SMBs even avoid POS systems due to these threats.
While it’s impossible to eliminate the risk of cyberattacks, you can use AI systems to manage the risks. Fortify your payment gateways, secure confidential data, and only use reputable processors.
Users can send and receive money through their smartphones via real-time peer-to-peer (P2P) apps like PayPal and Venmo. These are widely used for everyday transactions. For instance, if a group of friends dines out, they can split the bill through P2P apps instead of cash. Doing so eliminates the need to break big bills.
While large-scale P2P platforms for massive retailers do not exist yet, individual merchants can already integrate these apps into their payment processing system. Note that P2P systems settle payments instantaneously with minimal fees involved—if any at all. Saving 2% to 3% on charges will add up if you sell high-ticket items.
Not sure if your small business can afford a processor? Processing Card can help! You can refer to our quick guide explaining the most common credit card processing fees.
Some of the most widely used payment processing service providers in the country today include Stripe, PayPal, Due, Host Merchant Services (HMS), and Square. Each processor has varying strengths and weaknesses. For instance, PayPal suits businesses with low-volume orders, while HMS specializes in local eCommerce transactions.
Processing card payments involves multiple authorization requests from different entities, including the acquiring bank, card issuing bank, and payment processor. Authorizations only take a few seconds, although fully processing payments require one to three days.
Payment service providers (PSP) help merchants process electronic payments via mobile wallets, credit cards, direct debit, and real-time bank transfers, among other channels. PSPs often work with both brick-and-mortar and online businesses, but some providers have specific preferences.
On the other hand, payment gateways classify as services that PSPs provide. Essentially, these allow merchants to accept electronic payments online. Depending on your provider, you could even accommodate overseas transactions, although expect the fees to increase accordingly.
As their name suggests, real-time payments happen instantaneously. Unlike traditional processing platforms, real-time payment rails open end-to-end communication channels, thus speeding up the process significantly. Some of the most popular RTP platforms include PayPal, Venmo, and Zelle.
Payment gateways, or any other merchant services for that matter, gather revenue through transaction fees. For instance, Square charges a fee of 2.6% + $0.10. So, if you process a $1,000 credit transaction via Square, your business will end up paying $26.10 for the processing fees.
While several factors contribute to an effective payment processing system, business owners should always prioritize convenience. Choose a processor that accepts the payment options your customers prefer. After narrowing down your choices, assess the varying platform features and pricing plans, then see which ones best suit your business.
Also, don’t feel pressured into adopting every new payment method. Business owners should stay updated to make well-informed decisions on expanding payment options—not so that they constantly get a new processor. Feel free to explore the latest trends, but only upgrade as you see fit.
Don’t know how to get a card processor for your budding small business? Processing Card can help. Check out our resources explaining all you need to know about online payments!
Florence Carpenter is passionate about ensuring that the process of opening merchant accounts is as straightforward as possible. She graduated from the University of Michigan with a bachelor’s degree in Marketing.
