Change is the one constant that we can all count on. This is true on both a personal level as well as a business level. For consumers and merchants alike, there are many changes occurring within the credit card and merchant account industries that will affect the way business is conducted in the future. These changes have the potential to affect merchants in both positive and negative ways. Robert Livingstone is the president and founder of IdealCost.com; he is also a merchant rights advocate. He describes the following three trends which will impact merchants and how they do business moving forward.
Cell phone carriers move to gain market share
According to Livingstone, AT&T, Verizon and T-Mobile have been tossing around the idea of implementing technology which allows consumers to use their cell phone as a credit card. For example, instead of swiping your credit card through a card reader for credit card processing, the customer would simply waive their phone in front of a card reader. How this technology, which is already in use in Europe and Asia will affect merchants remains unclear, however it will undoubtedly change the way credit card processing is handled.
Increase in rates
Another trend mentioned by Livingstone is related to the passing of the Financial Reform. With the Federal Reserve looking into debit interchange related fees, there is a chance credit interchange related fees will actually increase. They may increase as much as debit interchange related fees decrease or possibly more. There is also a very real possibility that the government may impose an additional credit card processing tax which is passed from the processor to the merchant and eventually to the consumer.
Data breaches and chargebacks
In 2010 there seemed to be an increase in individuals who disputed credit card charges when in fact, those charges were legitimate. With the credit card industry firmly behind the customer when it comes to fraudulent charges, merchants are often left paying the price for these false claims of fraud. There doesn’t appear to be any change on the horizon that will address this issue or deter card holders from continuing with this disturbing trend. There has also been an increase in data breaches within the industry which is a concern for all involved parties.
The importance of understanding trends
In order for both merchants and consumers to save money moving forward, it is important to understand how these trends affect all of us. When changes are seen within an industry it is important to look at the big picture. While certain trends may save customers on one end, there may be a ripple affect where costs rise for other services. Credit cards are likely here to stay, at least in the foreseeable future, therefore credit card processing will continue to be an issue of concern for consumer, merchants and the industry as a whole. By understanding the current trends and how they will impact credit card transactions for everyone, you can make informed decisions that will save you money.
Photo via Verizon Business
