Reflecting on the stand-out payments events from 2018
2018 was a tumultuous year for the UK payments industry, with new regulations such as PSD2 driving innovation and changing the way we pay for goods and services. We look back on some of the most significant payments highlights from last year.
Introduction of the PCI standard
The key development of the last year was the introduction of the new standard from the Payment Card Industry Security Standards Council (PCI SSC) for Software-Based PIN Entry on COTS (SPoC). With this in place, the path is now open for Consumer-off-the-Shelf (COTS) devices to be harnessed by the payments industry, as a cost-effective and secure alternative to the traditional single-purpose payment terminal to further increase card acceptance points around the world.
This will have a major positive impact for merchants. Card payments overtook cash in the UK for the first time in 2018, with 13.2 billion debit card purchases made compared with 13.1 billion cash transactions. Despite this, some five million small merchants in the UK are still unable to accept card payments, due to the cost of investing in traditional card payment systems. For larger merchants the ability to leverage the many capabilities of connected devices to enhance the purchasing experience offers a previously untapped opportunity to drive consumer loyalty and increased sales.
With the new SPoC standard in place, accepting card payments has never been more accessible for merchants. It has the potential to lead to a revolution in the development of mobile-based in-store payment solutions, helping to maximise the number of payment acceptance points globally. Industry reports forecast the use of global mPOS solutions will grow 32-40% by 2025.
Boosting card acceptance with our Open mPOS product
MYPINPAD’s Open mPOS product is set to boost card acceptance amongst smaller merchants in 2019. This enables merchants, acquirers and PSPs to deploy SPoC (also known as PIN on Mobile (PoM) technologies without applying for their own PCI SPoC certification – removing complexity whilst saving time and money when deploying a mPOS solution.
For online payments, the issue of Strong Customer Authentication (SCA) hit the top of the political agenda in the European Economic Area in 2018. This is part of an ongoing debate in the payments industry over what balance we need to achieve between consumers’ desires for easy, frictionless payments, and their need for optimum data security to keep their personal details safe.
It is often the case that the drive to streamline the transaction process results in there being insufficient measures in place to verify that the purchase is a genuine one and not an example of card fraud. Too many security protocols, however, can result in friction at the checkout that can also lead customers to abandon their shopping.
Perfect timing for PSD2 arrival
With this in mind, the arrival of the Second Payment Services Directive (PSD2), and the accompanying Regulatory Technical Standard (RTS), couldn’t be more timely. These seek to set minimum standards for online payment security across the European retail sector, helping to protect consumers and merchants by providing a level playing field for the latter to conform to.
How will merchants thrive in 2019?
landscape in the UK has been going through a radical transformation in recent
years and this shows no sign of slowing down. To thrive in this increasingly
competitive market, merchants need to seek the right advice, guidance and
support from payment experts. Keep an eye out for our upcoming blog which will
explore our predictions for 2019.