3 Card Payment Changes Coming Your Way in 2015

By Gary Wagers, EVP
Banner Bank Retail Products and Services

This year, U.S. consumers will see a major shift in credit and debit card payment options, whether paying online or in the  store. With the rise of identity theft, data breaches and card skimming, increased security and financial protection is at the heart of these new card payment options.


1. Card Chip Technology


Apple has certainly heightened awareness for changes in payment technologies, but not everyone has an iPhone 6, and of those, not every financial institution has yet to enroll in Apple Pay. Therefore, the biggest change in credit and debit card payments that most consumers will begin to see this year is new card chip technology. Already used in more than 130 countries, the small silver or gold chip, located above the first four digits of a card number, won’t seem much different to U.S. consumers until merchants install chip-enabled terminals that will be available later this year. Once that happens, consumers will insert their card into the terminal, rather than swipe the mag strip on the back. Cards with the chip technology provide stronger security because unlike mag-stripes,  the data on the chip is very difficult to copy or counterfeit.


2. Mobile Wallet


Another recent  change in payment technology, pushed to critical mass by Apple, is the mobile wallet, whereby the mobile phone becomes the device for making or accepting payments. The mobile wallet uses the “tap and go” technology based on the smartphone’s built-in near-field-communication (NFC) wireless technology. Look for this payment type to grow as more merchants adopt mobile-friendly payment terminals and other big payment systems like Visa® and Mastercard® join Apple in this space. Mobile wallets offer added security over cards alone thanks to biometric authentication (e.g.., thumbprint) as well as tokenization (e.g., replacing the card number with a surrogate value). 


3. Digital Wallet


The digital wallet offers wireless mobile payment solutions in store, similar to the mobile wallet, but also includes the ability to make payments online, either through desktop or mobile devices. It is easier to link multiple accounts to the digital wallet, allowing the consumer to choose the funding source with every transaction. Other types of cards may be stored in the digital wallet, including loyalty cards, driver’s license and other identifying documents.  Security is also a big feature with the digital wallet, which uses high levels of data encryption and the option for biometric authentication.


Like all changes of this magnitude, bringing together all the pieces is complicated.  The majority of debit cardholders won’t have received chip cards until early 2016, and merchants will have to upgrade their terminals to support the new technology.  There will be a cost to merchants for new terminals that read chips and include NFC, but the added security has the potential to reduce the current fraud risk in card present transactions.  


It’s important to talk with your merchant service provider to make sure your business has what it needs to meet the changing technologies that your customers will come to expect. Learn more about Merchant Services solutions at Banner Bank.



More blogs