The payments industry news we focus on this week discusses various aspects of payments innovation, the rise of payment facilitators, and the concerning increase in online payment fraud.
How Digital Tipping Is Affecting Service Workers
Some service workers prefer cash tips as they are an immediate source of income and less trackable. But with more transactions going cashless, how are tip workers faring?
According to Marketplace, “some workers are seeing less direct cash tips,” which could potentially be a problem for those who are economically vulnerable. The article included conversations with two Starbucks employees about their views on digital tips, which provided additional context to the issue.
One employee preferred cash tips as they found digital tip distribution could be inaccurate if employees aren’t doing time punches properly. The other prefers digital tips as the company is responsible for distributing and there is less money to handle.
Still, the article admitted that going cashless can create new challenges for these workers. For ISVs looking to address this issue for their retail clients, consider Tip Network, a product from our sister company, Netspend.
Modernizing Modes Of Payments With Consumer Tech
Payments Dive shared some interesting alternative modes of payments that we could potentially start seeing in the future.
When it comes to wearables, smartwatches might be what comes to mind first. But did you know that there are now payment rings, bands, and cufflinks with near-field communication (NFC) chips that can also act similarly to a smartwatch?
Connected car payments also received a mention. Estimates say 70% of new passenger vehicles will be internet-connected by 2023, which means consumers could potentially pay for parking, groceries, or gas all within the car.
It’s exciting to see how payments are becoming embedded into a consumer’s day-to-day experience through NFC-connected accessories, cars, smart home devices, and more. To better understand the digitization of payments, we recommended watching this interview with Global Payment Integrated’s President Bob Cortopassi and Thulium CEO Tamara McCleary.
Giving Restaurant POS A Glow Up
Fast Casual shared some noteworthy trends on what a modern point of sale system needs as U.S. restaurants begin to re-open their doors.
“A POS today should include the following functions: omnichannel experience, integrations and extensions, frictionless checkout, contactless EMV payment, and data reporting.” Additionally, POS technology should aim “to give customers more control of the guest experience.”
While diners are ready to experience in-person dining again, they still crave the frictionless and contactless aspects of transacting with restaurants. ISVs should consider these new restaurant payment methods when looking at payment integrations.
Deep Diving Into The Payfac Model
Insider Intelligence and eMarketer teamed up to create a new report on Payment Facilitators, exploring how the model is reshaping the payments ecosystem.
“The payfac model is a framework that allows merchant-facing companies to embed card payments into their software—which in turn enables their customers to process payments... The model was created to help SMBs accept online payments more easily, specifically by providing those merchants with a simpler payment onboarding process than what has traditionally been available from ISOs and merchant service providers (MSPs).”
Numbers around the payfac model show impressive growth from 2021 onwards. However, becoming a registered payment facilitator may not be for everyone. To better understand what it entails, visit our blog post on our ProPay® Payment Facilitation Program.
Online Payment Fraud On The Rise
Although eCommerce merchants are reaping the benefits of increased sales during the pandemic, they continue to struggle with online payment fraud. Payments Dive explored the issue in-depth, reporting big surges in synthetic fraud, account takeover, identity theft, and chargebacks.
It’s critical for online merchants to have robust fraud detection and prevention systems in place to minimize the effects of payment fraud on their revenue. ISVs with integrated payments should work with their payments partner to ensure they are PCI compliant and take necessary precautions to protect their merchants from customer data breaches.
We hope you find this roundup helpful in staying ahead of the latest payment trends! Keep informed on the payment industry by subscribing to our email newsletter or following us on social media.