Credit Card Processing Blog

It seems like not a week goes by without Amazon making some kind of significant announcement. Most recently, the company surpassed the already high expectations Wall Street had for them. Because Amazon continues to grow and evolve at such a rapid pace, no one in retail or technology can afford to ignore them. That even includes the biggest players like Walmart.

Over the last few years, Walmart has made some very significant investments and acquisitions. The majority of those moves have appeared to be in response to things Amazon is doing. The same is true for their most recent move, which is believed to be a massive investment in Flipkart.

More Information About Flipkart and Walmart’s Proposed Investment

If this is your first time hearing about Flipkart, you’re not alone. But even though the brand isn’t that well known in the United States, it’s one the largest e-commerce companies in India. As of this month, the company has a valuation of $20 billion. Last year, Flipkart did $3 billion in revenue.

While e-commerce in India still has a lot of room to grow before it reaches any type of maturity, Flipkart has already built a very strong brand over the last decade. What’s interesting is both of the founders actually worked for Amazon before leaving to form their own company.

Last year, eBay did a significant deal with Flipkart by giving the company a $500 million investment, along with selling the Indian portion of their business. Then in August of last year, Softbank’s Vision Fund pumped an additional $2.5 billion into the company.

Given how much money the company has already raised and its current valuation, it’s not surprising that Walmart’s bid for a majority stake is quite large. Although the figure hasn’t been publicly disclosed, it’s believed to be in the $12 billion range. This would give Walmart key access to an emerging market with over 1.3 billion potential consumers. And given the dominance Alibaba has established in China, India is believed to be the next largest market that’s still available to Western companies.

Amazon Isn’t Relenting

It’s no secret that there’s a lot of competition between Amazon and Walmart. But after news came out about Walmart’s proposed offer, the level of competition became even more clear when Amazon submitted their own bid.

While the offer is believed to be around the same amount as Walmart, industry experts believe that Amazon will not be selected by Flipkart. One key reason is Walmart is committed to retaining Flipkart’s current structure. The other reason is a deal with Amazon would require Flipkart’s founders to sign a non-compete deal.

What This Means for Your Business

If the deal goes through, the main impact it may have on any US business that sells products is eventually providing easier access to the more than 1 billion consumers in India. We’ll keep you updated on this deal as it progresses, along with any other big marketplace news. In the meantime, if you want to serve as many customers as possible through your own website, be sure that your credit card processor is up to the task.

Since its launch in 2007, Fitbit has grown to own more than 20% of the wearable technology market. While huge companies like Apple and Google have created their own devices for this space, Fitbit has been able to remain the leading choice for tens of millions of loyal consumers.

What makes Fitbit’s devices so appealing is they’re able to monitor everything from heart rate during the day to sleep patterns at night. As a result of all this useful data collection, most users wear their devices around the clock. That can include times like exercising when they may not have anything else on them.

So let’s say someone wears their Fitbit when they go out on a run and then remembers that they need to pick up a few items from the grocery store. This is one of many examples when it would be very convenient for payment technology to be built into the device. And that’s exactly what this device maker is planning to do.

Fitbit’s Plan for Payments

The idea of adding payment technology to a wearable device is by no means new. It’s something we’ve covered in detail, including the Apple Watch. While Apple’s wearable device didn’t debut with as much consumer resonance as many of the company’s other offerings, it is a category that has continued to grow for Apple. As of mid-2018, more than thirty million Apple Watches have been sold.

Because Apple has already paved the way for adding payments into wearable devices, Fitbit may be in an ideal position to piggyback on that success. With Fitbit Pay, there’s no need for someone to sign up for a new payment account. Instead, a user simply chooses the debit or credit card they want to connect.

Once a card is synced with a device, checking out is as easy as hitting a few buttons. The technology that makes this type of contactless transaction possible is near-field communication (NFC). Not only is NFC very convenient, but it’s also proven to be quite secure.

Limitations of Fitbit Pay

While Fitbit is in a great position to get a lot out of integrating payments, there are still a few challenges they will need to overcome. The first is to add support to all of their devices. Currently, Fitbit Pay is only supported by a select number of devices like the Versa and Ionic.

Another challenge is educating consumers. Since Fitbit has a lower price point than the Apple Watch, many of their users may not be as familiar with certain types of technology. However, the good news is there aren’t any proprietary compatibility issues. As long as a terminal supports contactless payments, it will work with devices made by Fitbit, Apple, and other companies.

That’s also good news for merchants, as a single terminal can support multiple types of transactions. If you want to utilize this type of terminal and ensure that you always have great support for it, be sure to take a look at our comprehensive list of the leading payment processors.

Last October, we shared seven different tips for National Cyber Security Awareness Month. One of the tips was to utilize encryption. We explained that point-to-point encryption is the current standard for ensuring that credit card data is fully encrypted all the way from submission through payment processor receipt.

Because strong encryption is absolutely essential for protecting online payment data, a mandatory upgrade is being rolled out in the coming weeks. This upgrade is being handled by the Payment Card Industry Security Standards Council. The new encryption standard they’re implementing is known as Transport Layer Security 1.2.

More Details About This Encryption Update

The existing standard that many e-commerce platforms and providers have been using is Transport Layer Security 1.0. This standard has been around since 1999, which means hackers have had plenty of time to study and exploit it. In fact, there were a number of vulnerabilities discovered that allowed attackers to fully decrypt network traffic protected by TLS 1.0 back in 2014. These vulnerabilities revolve around fundamental protocol design issues, which is why upgrading instead of simply trying to patch the problem is so important.

As far as exactly why businesses need to comply with this update, the biggest reason is it’s the best way to protect all of their own data, as well as the data of their customers. Not following through with this upgrade can create a huge liability for any business that transacts online. Another reason is as different services drop support for TLS 1.0, not upgrading to a newer version means different parts of a website or online software that a business is using will break.

What Does This Online Encryption Change Mean for Your Business

Although June 30th is the official date of this change, the good news is it’s unlikely to cause any significant problems for online merchants or consumers. The main reason is this transition has been taking place for some time. For example, Stripe already dropped support for both TLS 1.0 and 1.1 earlier this month. And for any affected merchant, all that needed to be done was a simple OpenSSL upgrade by their tech team or hosting provider.

If you have any specific questions about how your business may be affected by this change, contacting your payment processor is the best way to get an answer. In the event they aren’t able to answer your question in a timely manner, it’s a strong indication that your business will greatly benefit from choosing a new payment processing company.

Over the past few years, we’ve covered a wide variety of new payment technologies. Both payment and consumer electronics companies have experimented with adding payment capabilities to all types of devices. Given the ongoing innovation in this space, it’s not surprising that there’s a new target that many players in this space have their sights set on. That target is adding payment technology to cars. Although this may seem a little far-fetched at first, we’re going to cover everything you need to know about why in-car payments actually make a lot of sense.

Who’s Focused on In-Car Payments?

As of now, there are four big companies who are really focused on in-car payments. Two of those companies are car makers, and the other two are credit card brands. The four companies we’re talking about are Honda, General Motors, Visa, and Mastercard. Each car maker has chosen to partner with one of the credit card companies. Honda is working with Visa and General Motors is working with Mastercard. The goal of these payments is to allow people to pay for parking, gas, and tolls without needing anything other than their car.

The Technology Behind These Payments

Although this concept is relatively new, the current solutions aren’t trying to reinvent the wheel. In the prototype that Honda unveiled at CES, their method of transmitting payment information is Bluetooth. This is a proven technology, and is one of the two technologies most commonly used for contactless payments. The other technology is NFC. The reason Bluetooth makes more sense for car payments is it has a bigger range than NFC.

While it seems like the basic technology groundwork is already laid, there are some interesting hurdles that will need to be cleared in order for this concept to really take off. Those hurdles have to do with infrastructure that can accept payment information. Solving those challenges are why specialty companies like Gilbarco Veeder-Root and IPS Group are putting their energy into equipping gas stations and parking lots with the right technology.

The Future of In-Car Payments

In terms of what makes this type of payment appealing, there are a number of different scenarios that are easy to imagine. Some of these have to do with convenience, while others are based on safety. As more companies push into this space, it will be interesting to see how consumers react. And if other payment technology we’ve covered in the past is any indication, in-car payments may ultimately be the spark for different kinds of innovation within the payments space.

We will continue to keep you updated on the progress of this and other forms of new payment technology. If you want to ensure that your business is always ready for any new technology that make take off, choosing a payment processor that’s dedicated to actively developing their offerings is the best thing you can do.

At the beginning of the year, plenty of people thought that cryptocurrency and the blockchain were going to take over the financial sector in no time. While those technologies are still very interesting, the frenzy around them has cooled down significantly. But that doesn’t mean it’s been a boring year for the payments space. Because so much has happened in the span of just six months, we want to highlight three of the most interesting credit card trends:

  1. Legalized Sports Betting

In what came as a big surprise to many people, the Supreme Court recently ruled in favor of states allowing individuals to place bets on sporting events. This activity is expected to start in New Jersey and then expand throughout the rest of the United States. Although legal US sports betting is expected to quickly bloom into a huge industry across the United States, that doesn’t mean it’s without any hurdles.

Just as dispensaries and other businesses in the cannabis industry have faced quite a few challenges, there are concerns about payments companies allowing bets to be placed with credit cards. As of now, none of the major payments players permit this activity. But given that illegal betting is already a $150 billion a year industry, it will be interesting to see if any of the major payments players take a gamble and allow betting activities through their cards.

  1. Consumer Delinquencies

Although the stock market and overall economy have been very strong, individual consumers are facing some challenges with their use of credit. In addition to general credit card delinquencies trending upwards during Q1, store-branded card delinquencies actually hit their highest rate in seven years. According to Equifax, the specific reason for those delinquencies spiking is a common belief among consumers that they can stop paying their cards when a retailer goes out of business.

  1. Small Business Owners

The other very interesting trend that’s showed up in recently collected data is that small business owners are heavier users of credit cards than normal consumers. Not only do owners have an average of just under 5 cards, but almost a quarter of the people in this group have used at least one personal card to fund business expenses. This trend is part of why so many big companies are putting a lot into B2B payments and lending.

Managing finances is just one of the many challenges that small business owners face. Reliably processing payments for a reasonable price is another very common challenge. If you’ve had issues with the pricing or service level of your current processor, there’s no reason to settle. In fact, finding a great processor is likely easier than you expect.

The reason it’s not nearly as hard as many business owners assume is we’ve created a great resource for comparing credit card processors. By looking through that page, you’ll be able to see exactly what rates are available and the types of features you can expect from a leading processing company.