Payments may not be the first area you think of when it comes to modernising your company’s technology — it’s more often a box to check or a cost centre to minimise than an urgent opportunity for innovation — but if you haven’t looked at your payment platform in a while, you’re likely missing an opportunity.
Continually evolving payment platform trends come with different opportunities and challenges than in decades past. At Square, we believe that new payment technology is at the core of successful commerce interactions.
Evergreen challenges have become even more pronounced, requiring more payment security expertise and focus: Hackers and fraudsters have better tools to compromise customers’ data security; compliance obligations are more complex than ever; and consumers no longer have patience for clunky buying experiences.
At the same time, new payment technologies and business models are making it more possible every day for companies to provide unique, delightful, and safe customer experiences. So what does this mean for your business? As we move into the digital era of payments, here are several industry payment platform trends and technologies you should be aware of:
What are payment service providers?
Payment service providers connect merchants to financial systems so they can accept credit and debit card payments from customers. Payment service providers act as the middleman for merchants, consumers, card brand networks, and financial institutions. But now sellers are realising that there’s a difference between commodity payment providers and platforms that manage payment challenges for them.
Much in the way that web service platforms have allowed companies to outsource much of their IT overhead, modern payment platforms allow brands to focus on building their products and serving their customers instead of managing the infrastructure required to maintain a reliable, secure, and compliant payment stack.
What is PCI?
Payment card industry (PCI) compliance is required by credit card companies to help ensure the security of credit card transactions. But it is not just the credit card companies that need to maintain these compliances. PCI compliance standards require merchants to handle credit card information in a secure manner to help reduce the likelihood that cardholders would have sensitive financial account information stolen.
Best-in-class payment service providers are offering more than commodity payment processing; they are providing payment security that solve their customers’ biggest payment pain points, from fraud prevention and protection to rising costs to chargeback representation.
As an example, Square removes the burden of PCI compliance from our sellers. We take on all PCI liability ourselves. Businesses that implement Square universally avoid significant payment security and compliance costs. Businesses that use Square don’t have to develop a plan for payment security, hire and manage employees or contractors to implement or verify security, or purchase insurance against payment data breaches.
What are the benefits of payment platforms?
Separate business units for eCommerce and retail don’t make sense in our modern world. Today’s consumers interact with brands across a number of channels and platforms and expect a coherent experience — a huge challenge for sellers using a patchwork of technology providers.
The most successful brands are leveraging comprehensive omnichannel commerce tools, like payment platforms, that allow them to meet their customers where they are, while simplifying their system architecture.
The best payment platforms enable companies to make a sale anywhere, without introducing operational headaches. That means having the right hardware for in-store and mobile payment use cases. It means securely storing customer payment information for use across the entire ecosystem (and keeping the company out of scope for PCI compliance). And it also means providing a unified, real-time flow of payment data that makes answering business questions and managing accounting and reconciliation needs easy.
How do payment platforms work?
You may not realise how many steps are involved once the customer hands the merchant their payment credit card. Payment platforms handle the below steps in a matter of seconds.
- The payment platform gateway securely sends the transaction to the processor
- The processor verifies and approves the transaction
- The customer’s bank sends money to the processor
- The processor sends money to the merchant’s bank
- The processor approves or denies the payment
- The merchant receives the message of approval or denial
With the rise of e-commerce, more and more payment processing occurs without the merchant and the consumer ever meeting. Just as consumers are shopping differently, technology improvements are changing how we keep payments and related data secure, reliable, and available. Advanced payment platforms are leveraging trends like machine learning and blockchain in novel ways.
How to setup a secure payment service
There are a number of payment platforms out there and ensuring that yours is secure requires an expert. So if you are looking for a secure payment service, then you’re in the right place.
Square machine-learning payment platform advancements have drastically improved our abilities to detect and prevent fraud. We’re constantly analysing the firehose of data from our payment ecosystem to mitigate risk for our sellers. Our models assess payment events through the lens of dozens of data attributes so we’re able to both identify fraudulent behaviour as it happens and discover new trends.
We also believe in combining the best of machine learning and human expertise, so our data science and risk analytics teams work together daily to adjust controls based on known threats and nuanced analyses.
As another example, we’ve leveraged the same cryptographic signing technology from blockchains to create financial ledgers that are provably unaltered, ensuring an attacker couldn’t gain access to our systems and move money around undetected.
Companies that haven’t examined new payment technology recently might be pleasantly surprised by what’s possible in this new era. Millions of sellers rely on Square to take payments anywhere and anytime, so we take the responsibility to build cutting-edge and reliable payment platforms seriously.
The best payment platforms should complement your efforts to create a buying experience that wows your customers, allowing you to spend less time thinking about PCI compliance, payment security, reporting, and reconciliation and more time on the customer experience that only you can build.