How Retailers Can Cash In On New Commerce

Contributed by Rebecca Kennedy

Cash and coins may not yet be a thing of the past, but if the big names in commerce have their way they’re sure on the path to obsolescence.

The past year has seen a massive leap towards a cashless society, with retail at the forefront of the brave new commerce world, and big names like MasterCard, Square and Apple Pay all driving the digital push.

Here are four trends every retailer should know about as they consider payment technology and POS in 2017.

Chip and Pin

Chip and pin debit and credit cards aren’t new but are on the rise due to their security features. Also known as EMV, they’ve have been steadily replacing magnetic stripe cards for the past decade, offering a reduction in fraudulent card use.

They utilize a chip that creates a unique one-off code for every transaction. This confirms the card is authentic, while the requirement of a pin or signature confirms the identity of the user.

In October 2015, the US followed other countries implementing a formal migration from magnetic stripe cards to chip and pin through an EMV liability shift. Basically this meant any financial institution or merchant not using chip technology would be liable for the cost of counterfeit card transactions.

The result has seen chip and pin card adoption more than double in the US throughout last financial year, with Visa reporting a jump from 1.41 million EMV cards in August 2015 to 326.8 million in June 2016.

It was an even more startling spike for retailers, with EMV card reader take-up quadrupling from 301,000 in August 2015 to 1.3 million in June 2016, and Visa noting a 35% reduction in counterfeit fraud as a result.

The adoption of EMV is only set to increase, with Statista forecasting the full rollout of EMV cards will probably take until 2018, while 100% POS terminal adoption will take until 2020.


On the flip side of chip and pin is contactless payment where a card communicates with a payment terminal using near-field-communication (NFC) or Radio Frequency Identification (RFID).

Unlike chip and pin payments, no authentication is required to make a transaction. The user simply waves their card close to a POS terminal or taps it to pay. In a bid to combat fraud risk, transaction amounts are usually limited to small value.

However, research indicates the ease of payments means customers are more likely to use their card and spend more at a retail outlet than they would if paying in cash.

The UK Financial Times notes in the United Kingdom this expenditure equated to £9 billion in the first half of 2016, an increase of £1.5bn over the entire previous year. This was in part due to authorities raising the minimum spend limit from £20 to £30 pounds, but also due to more retailers embracing the technology.

“‘We anticipate the use of contactless cards will continue to increase, particular as charities and transport operators outside London recognise the benefits this technology can bring,” UK Cards Association’s head of policy Richard Koch, told the Financial Times.

Digital Wallets

Again, digital wallets are not new, with Apple Pay, Samsung Pay, and Android Pay all readily available. But after a lukewarm reception in the US compared to other countries, they are gaining popularity.

In a nutshell digital wallets allow consumers to download an app, add their credit or debit card details to their “wallet” and pay by holding their phone near a contactless point of sale or payment processing terminal to complete a transaction.

Security comes in the form of fingerprint technology that authorizes the payment or a four-digit code keyed into a smartphone.

It works using near-field communication technology which allows phones and tablets to share data with other NFC-enabled devices like point of sale or payment terminals. The benefits for consumers include abandoning bulky physical wallets and increased security. For retailers it opens a bevy of doors in terms of loyalty promotions, gift cards and consumer data.

Retail Customer Experience says 2017 will see more and more consumers converting to this technology due to the seamless, convenient and swift experience it provides.  “With all the major players in the mobile device industry having delivered their own version of the mobile wallet (e.g. Apple Pay, Android Pay, Samsung Pay),  and Apple Pay reporting a growth of one million new users per week, this technology will continue to make strides in the coming year.” 

And it’s not just smartphones and tablets enabling the trend, wearable technology is also contributing to the rise of the digital wallet and is likely to increase its adoption further.

What This Means For Retailers

Setting up a point of sale system may now be easier than ever before courtesy of apps, mobile devices and easy to access accessories like tablet kiosk stands, and barcode scanners. But the methods of payment are ever increasing, and the benefits of catering to them all are very real.

For the retailer that means if you haven’t got the latest chip card readers with contactless capability, you should. And sooner will be financially better than later.

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