The SPENDemic: Holiday Shopping During COVID-19

COVID-19 has changed everything about the way we live, and this trend doesn’t seem to be pausing for the holidays. Parties are significantly smaller or nonexistent, many out-of-state family members won’t be returning home, and tree lighting ceremonies have gone virtual.

And while the spending habits of gift buyers have also changed, consumers are still shopping for presents for their loved ones. The infamous Black Friday shopping has been slowly moving to a more virtual market, but this year has seen the highest increase in e-commerce retail sales.

To discuss how the pandemic is affecting both merchants and consumers during the 2020 holiday season and how it will alter future holidays, PaymentsJournal sat down with Jennifer Sherman, SVP of Product at NMI, and Raymond Pucci, Director of Merchant Services at Mercator Advisory Group.

2020 has certainly been an unprecedented year, and as we enter into the final quarter during the holiday season, high e-commerce numbers are expected. According to the chart below, in 2019, when pandemic was just a dramatic word used in cinema, there was already an 11% increase in e-commerce sales.

Retail vs Travel E-commerce Sales

While travel is down a whopping 75%, 2020 is estimated to see a 17% increase in e-commerce sales, 6% higher than the previous, non-pandemic year. “And I wouldn’t be surprised, given that Q4 brings the holiday season, we might even be closer to 20% year-over-year increase in e-commerce retail sales for the U.S. market,” said Pucci.

Although that number is expected to drop over the next two years as the pandemic abates, there is still a predicted 10% increase from 2020-21 and a 12% increase from 2021-22.

Merchant success during this holiday season

While the global pandemic may be on the naughty list, consumers are still buying for those who are nice. Retailers everywhere have had to alter their sales operations in ways that make customers feel that shopping is safe, secure, and hassle-free. This can mean many things, both for in-person transactions and online shopping. “NMI has recently done a poll that showed that 29% of consumers are actually still planning on doing most of their holiday shopping in store,” said Sherman, “where 40% are expecting to do some mix of in store and online.”

For the in-store shopper, everything is about health and safety. Changes can consist of adding appropriate signage indicating the maximum number of customers at one time and the direction of foot traffic, offering masks and sanitizers, and creating a touch-free environment. “That means contactless and touch-free payments, things like QR codes, and ensuring that the devices you use to accept card present payments [also] accept contactless payments,” added Sherman.

In terms of online shopping, merchants must be realistic and upfront with shoppers about shipment times, allowing customers to figure out when purchases should be made for them to arrive on time. This means that earlier holiday order cutoff times must be properly advertised and known.

Convenience is also a major key to a successful buying and selling season. “I was reading in a Salesforce blog a few months ago that they saw over 100% month-over-month increase in purchases from social media referrals at the height of lockdown,” said Sherman. Merchants should prioritize social media buying, making it easy for consumers to purchase directly from sites like Instagram and TikTok. This includes buy buttons on the seller’s account that people can click to order the advertised product without having to go to the retailer’s website to make the purchase.

Preparing for pandemic shoppers

Nobody could’ve been prepared for the chaos that COVID-19 brought to the world. And for those merchants who feel like their technological infrastructure is behind their competitors, Sherman offers two words of sound advice: “don’t panic.”

In many instances, catching up with the competition is not as hard as one may think. For example, an NMI survey found that 32% of merchants reported the main reason they don’t have contactless payment options is because they don’t have the technological capabilities or the time to set it up. “But with today’s cloud based solutions, a merchant can be up and running on a contactless device in as little as 72 hours,” countered Sherman.

The same is true for generating and accepting QR codes and QR code payments, as well as implementing buy buttons on social media. “We’ve always seen those as the domain of big retailers with big budgets to spend money on big e-commerce,” explained Sherman, adding “But it’s just not true. Those solutions are available for the SMB today.” Because the solutions are accessible in the cloud, all of these options can be executed rather quickly.

“You could get started as little as late next week,” noted Sherman. “And you can be up and running by the time your holiday shoppers come knocking.”

Watching the entire season of “Tiger King” in two days, building a home gym, and assembling countless 1,500 piece puzzles are all COVID trends that have come and gone. So it’s hard to say which trends are pandemic-specific and which will become a permanent part of our daily lives.

“I think COVID has created changes in behavior that we are going to see for years to come,” said Sherman. Consumers are going to continue to look for both speed and convenience when ordering online, picking up in-store or curbside, and shipping goods to friends and family. They will also expect seamless return policies, whether it’s through shipping or an in-store location.

Contactless payments will also continue to be a popular and more broadly adopted payment option. “Consumers are going to see that faster [check out] experience and expect it,” added Sherman. Safety and security will continue to be a top priority, with merchants expected to ensure the data and privacy of customers is well-protected.

 “Safety and convenience are going to reign supreme in 2021 and most likely beyond,” concluded Sherman.

Source: https://www.paymentsjournal.com/the-spendemic-holiday-shopping-during-covid-19/


Omnichannel to Omnipresent – How Retailers Should Navigate the Social Landscape to Drive Purchase Decisions This Holiday Season

The holiday season has always held the ability to make or break the year for retailers. A successful holiday blitz can mean the difference between finishing the year in the red or in the black.

Not since the Great Depression has that statement rung so true.

This holiday season, it’s critical for retailers to grab shoppers’ disposable income by marketing effectively on every channel to Millennials, Gen Zers, Gen Xers and more. While each demographic group has unique shopping triggers, what remains true across all of them is that to be top of mind for purchasing decisions, retailers must tell their story consistently on every channel.

Today, it’s not enough to be on every channel. Brands must be omnipresent. And not just omnipresent, but consistently authentic, meaningful and self-aware. It’s a tall ask, but it’s what retailers must do to win this holiday season.

Three tips will help you tell a consistent story that reaps sales this winter – form an emotional connection with consumers; offer items they can’t find anywhere else and that connect with their values and ideals; and engage informal evangelists and micro influencers on social channels.

Form an Emotional Connection

record number of consumers are abandoning brands to which they were formerly loyal. They’re switching based on a variety of factors. Some, like cost, make sense given the current economic environment. Others, such as the desire to try new and different things, may come as a surprise.

Gen Z shoppers in particular are prone to abandon brands on a dime that they no longer perceive as sharing their values or offering unique items that make them feel set apart as individuals. In these cases, cost is not the determining factor. Affinity is.

In generations past, purchase decision was binary. Which brand offers me the best value for the cost? Today, it’s more about feeling.

How does this brand make me feel about my purchase?

Do I agree with their supply, manufacturing, distribution and marketing practices?

Do they share my values?

Do they make me feel unique?

If you want to drive purchase decisions this holiday season, you need to connect with shoppers’ hearts, and not necessarily their pocketbooks.

Offer Unique Items

What is the holiday season about if not finding and giving the perfect gifts to loved ones? More than other demographic groups, Gen Zers are looking for unique items more so than they are brand affinity.

They shop across all formats, from boutiques to online stores. In a single day, they could shop in person, on their laptop and from within the Instagram app on their smartphones.

At every step of the journey, they don’t just watch brands, or consume marketing messages; they experience them. Across America, for retailers to win this winter, they will need to offer the items their shoppers want in ways that simulate the experience of hunting for, and finding, rare and hidden treasure.

Engage Informal Evangelists and Micro Influencers

In light of the fact that COVID-19 isn’t going anywhere anytime soon, retailers must add social strategy to their holiday marketing efforts. People are spending more time at home consuming entertainment and gaming.

Nothing illustrates this shifting reality more clearly than the fact that Fortnite hosted a concert attended by 12.3 million people. The lesson for retailers is clear – we must go where our shoppers are and engage them effectively there.

Social media must be one of those places, because it is where so many shoppers spend their time, especially in the COVID-19 era. Influencers can be particularly effective here, when used appropriately.

Celebrity influencers aren’t the magic bullet they used to be. Gen Z shoppers in particular are leery of celebrities who have just shared their reach to the highest bidder. Instead, they look for micro influencers who carry on collaborative discussions with 30,000 people or less.

Instead of shifting a large amount of marketing budget to one celebrity influencer, look for informal evangelists or brand loyalists who you can partner with to reach your ideal audiences. This tactic should work with Gen Zers and others who want to know and align with who they buy from, and can snag the dollars of those who are discerning and disciplined shoppers.

A Final Word

As you chase limited disposable dollars this holiday season, it will be tempting to run toward one trend after another. Resist the urge to be a chameleon this winter. Even as you develop distinct strategies for various demographic groups, remember that every person is an individual.

No two are alike.

Focus on who you are and how your customers interact with you. True customer engagement comes by how well you get to know them, and how well they get to know you. Bonds are formed through relationships. Get to know your customers so well that you can anticipate their needs, wants and aspirations and then speak authentically to them.

source: https://www.paymentsjournal.com/omnichannel-to-omnipresent-how-retailers-should-navigate-the-social-landscape-to-drive-purchase-decisions-this-holiday-season/


How to Fight and Prevent Credit Card Chargebacks in Your Small Business

A credit card chargeback is when a merchant charges a credit card for a transaction, and the cardholder later disputes the charge. This might happen because the cardholder is truly a victim of fraud.

In other cases, merchants are the ones who fall victim. Sometimes consumers file for a chargeback with their credit card company even if the purchase was legit.

Chargebacks are unfortunately on the rise. According to a whitepaper from Juniper Research, chargebacks are increasing 20% each year — with the clothing, furniture and high-end merchandise sectors at the most risk.

Below, we’ll dive into ways you can fight credit card chargebacks to protect your business, and how to prevent them in the first place.

Why do chargebacks occur?

What causes chargebacks in the first place? Some reasons consumers may request a chargeback from their credit company include:

Credit card fraud – The customer’s credit card information was stolen

Friendly fraud – The cardholder received the product/service but still requests a chargeback); friendly fraud includes:

  • Forgetting about the purchase
  • Not recognizing the merchant name
  • Displeased with product or service
  • Unclear return policy

Merchant errors – This may include double-charging a customer, entering the wrong information, etc.

How a credit card chargeback hurts your business

Credit card chargebacks are detrimental for small businesses for obvious financial reasons: You lose the money from the transaction. But there’s more to it than that. The 2016 LexisNexis True Cost of Fraud Study reports that for every dollar of nominal loss, merchants lose a total of $2.40 due to chargebacks, fees and stock replacement.

And if it happens too frequently, you could face long-term challenges, Jacob Lunduski, financial industry analyst at Credit Card Insider says. “If a business accumulates too many chargebacks, they can lose the ability to accept credit cards from their consumers.”

Krista Fabregas, ecommerce analyst at FitSmallBusiness.com says that credit card processing companies and financial institutions may also consider this a black mark on your account. “If the chargeback rate is deemed high, processors will consider the account high-risk,” she says. “This can lead to withheld deposits, account suspension, higher processing rates, and even closure without warning.”

While you might think that you can operate without accepting credit card payments, you could be wrong. Trends indicate we’re moving to a cashless society. “In this day and age, when many people prefer cards, that could put a big crimp in the bottom line,” says Ellen Cunningham, marketing manager at CardFellow.

It’s a balancing act of what works for your business and what works for your customers. “On one hand, businesses want to please their customers and address their return issues, but at the same time handling large amounts of chargebacks becomes a timely and costly process,” says Chris Marchand, VP of business development at Verifi.

How to fight credit card chargebacks and deal with disputes

In the unfortunate circumstance that you do find yourself facing an invalid credit card chargeback, there are a few steps you can take to increase your odds of winning.

“Don’t just automatically assume that all chargebacks are valid,” says David Bakke, personal finance expert at Money Crashers. “If you’re fairly certain that you can state your case and get the chargeback attempt denied, go ahead and do so.”

Let’s look at ways to increase your odds at winning the case — and keeping your money.

Contact the customer directly

“Most of the time, customers bypass merchants when doing chargebacks and go straight to the card issuers,” says Marchand. He’s not wrong. In fact, one eConsumer Services survey found that more than 80% of shoppers have contacted their bank before trying to deal directly with the seller in cases of chargebacks.

That’s why he and many experts agree that merchants should get in contact with the customer directly to understand the issue and see if there’s a way to solve it. Fabregas recommends doing this BEFORE reaching out to the bank.

“Contact the customer to see if there’s simply confusion on the charge, or another issue, like a defect, that you can resolve outside of the dispute,” she says. “A retailer can call a customer to see if another family member made the purchase using their card. This happens often in families with teens, and usually the purchase is legitimate.”

If this is the case, Fabregas says it’s still important to respond to the dispute. “Don’t rely on the customer to call their card company and approve the charge,” she says. “Clearly describe your conversation with your customer in your response documentation.”

Once you’ve updated the dispute, you’ll still want to maintain those open communication lines with customers. “Keep them informed of the status,” says Marchand. “Nothing frustrates a customer more than a lack of communication about their dispute and/or forcing them to contact you over and over again to find out what the status is.”

Remember, the communications with your customer can — and should — continue to be friendly. “Use the chargeback engagement process as an opportunity to improve customer service and brand relations,” Marchand recommends. “If you don’t view them as the enemy or automatically presume fraud, you’ll be able to work out the chargeback by helping the cardholder find a solution that will appease them and stop the dispute.”

Act quickly

Time is of the essence when it comes to credit card chargeback disputes, and you’ll want to act in a timely manner to have the best chances of winning.

Pay careful attention to deadlines and timelines. Mark them in your calendar and set alerts to remind yourself. “If you miss the deadline, you have no recourse,” says Fabregas. She also points out that merchants who fail to respond could receive an additional bad mark on their account.

Cunningham recommends completing everything AHEAD of the deadline to even further increase your odds — and to limit the risk of a bottleneck somewhere along the process. “There are usually a few companies involved in passing along documents to fight a chargeback,” she says. “The sooner you provide the information, the better your chances of having everything submitted on time.”

One key: “Don’t rush so much that you forget something,” Bakke says. Which brings us to our next tip …

Be thorough in your documentation

Jeff Neal, owner of The Critter Depot, has had to deal with credit card chargeback disputes in his business. “We normally win because we’re able to provide the documentation that banks need to confirm the customer actually received the product,” he says. They’ll use screenshots of email correspondence and tracking information, along with any other relevant documentation available.

But merchants conducting in-person transactions don’t always have digital correspondence or tracking documentation to provide. In these cases, you’ll likely have to submit your documented return policy and signed charge slips.

Before you send everything off, give it a final quality assurance review to make sure you’ve been thorough. “Check and double check the chargeback notification letter to ensure you’ve provided everything the bank requested,” says Cunningham, “If you don’t know what a particular document is, ask your processor.”

And if you have additional documentation that further helps your case, feel free to send it along. In fact, Cunningham recommends sending more information than you think you need to. “I sometimes hear from businesses that thought simply sending over a signed receipt was enough proof, only to lose the chargeback,” she says. “Send signed receipts, email correspondence, delivery tracking, anything you have to prove the legitimacy of the transaction.”

How to prevent credit card chargebacks

While there’s not much you can do to prevent a chargeback after the fact, you can take steps to prevent future instances.

Update your merchant account

Sometimes, a credit card chargeback happens because a shopper doesn’t recognize the name of the business on their statement. You might have a parent company name or a former business name that doesn’t resemble your brand now. Fabregas says this is something that many merchants forget.

“A surprising number of businesses don’t check this with their processor,” she says. “Having your exact website or store name appear on statements prevents most recall-related disputes. Plus, adding the phone number gives customers an easy way to inquire about the charge before initiating a dispute.”

Going a step further, you’ll want to be descriptive in additional billing guidelines and descriptors. This can also help customers better recall the transaction. And although there are character limitations, you’ll want to pack in as much specific information as you can to convince a cardholder that they’ve actually made a purchase.

“Fraud mitigation platforms can address the matter by sharing shopping cart-level data, such as merchant’s name and contact information, date of purchase, name of device used in the order process, and item or service descriptions (size, color, style) between cardholders, merchants, and issuers when a dispute arises,” says Marchand. “By provisioning this data directly into the issuing bank’s call center, online or mobile applications, a questionable charge can be resolved directly with the customer.”

Adopt the right technology

Technology has completely changed the way we do business. And this continues to be true when it comes to credit card payment processing. There are many tools available that can help you prevent credit card chargebacks — the main one being a credit card payment processor from an accredited company.

At a minimum, Cunningham recommends working with your processor to use the best compatible anti-fraud technology. “Some tools, like Verified by Visa and Mastercard SecureCode, reduce your liability in the case of chargebacks,” she says. “If you implement those tools, it’s much less likely that you’ll even get a chargeback in the first place.” But remember that this also has the potential to work AGAINST you, making it difficult to successfully appeal a chargeback.

Verify cardholder identity

According to data from Clearsale, stolen credit cards are the No. 1 cause for chargebacks, accounting for 30% of instances. Verify cardholder identity for every purchase with a photo ID – and don’t forget to make sure the signatures match.

As an extra step, send an immediate email receipt so that shoppers are alert instantly about purchases made on their card. The receipt should be itemized and contain details like items purchased, date and vendor location to help jog their memory.

Analyze your chargeback incidents

When you do have chargebacks, it’s important to conduct a post-mortem to help understand what went wrong and why. This can also give you further insights into how to best prevent chargebacks in your business.

This post-mortem is also an opportunity to see if there are specific issues with your products or services that you might need to address. “See if there are things you can adjust in your business model or level of customer service so a chargeback of that particular nature won’t happen again,” says Bakke.

Get your employees in on it

Your staff are the first line of defense against fraud. Include loss prevention in your employee onboarding so that they start the job with a fresh review.

“Consistently and frequently train employees on operational compliance, specifically as it pertains to points of purchase, returns and exchanges, and managing customer service issues,” says Guillot. If your employees are trained to handle issues head-on, you can avoid the chargeback dispute altogether.

How credit card chargebacks by the numbers: other stats to know:

And if you need even more convincing as to why preventing and handling chargebacks should be a priority, consider the following:

  • Consumers do it because it’s easy. The onus is on you, the merchant, to prove the transaction is valid. 81% of consumers admit that they filed a chargeback simply because it was convenient
  • Most consumers go straight to the bank; 58% do not reach out to the merchant when filing a chargeback. Only 14% of cardholders contact merchants prior to filing a dispute.
  • The top merchant challenges that merchants face when dealing with fraud are: Customer identify verification (60%) Delay in payment confirmation (43%) Confirmation of delivery (44%) Address verification (45%) New payment methods (43%) Limited ability claim products (25%) Fraud assessment (11%) International payments (13%) Lack of specialized fraud detection (15%) Manual order reviews (14%)
  • Un 2019, merchants lost 4.4% of their revenue due to chargebacks.

Final words

While they’re a nuisance to deal with, a little bit of due diligence can go a long way when fighting illegitimate credit card chargebacks. The best way to deal with them? Lessen your chances of falling victim to chargebacks in the first place.


What Every Merchant Needs to Know About Business Credit Repair

Small- and medium-sized businesses are finding it increasingly difficult to navigate today’s complicated credit landscape. Maybe you’re negotiating vendor payment terms or searching for a business loan. Perhaps you’re planning upcoming equipment or building investments, or preparing for a national product launch.

Or, you’re simply trying to improve your business’ financial picture as you project future growth. Regardless of the reason, a good business credit profile is key.

Background on Your Business Credit Score

Your company’s business credit score gauges the overall creditworthiness of your business. The business credit score is derived from the data in your business credit report.  

Four major business credit entities play major roles in your credit report. Dun & Bradstreet, FICO SBSS, Experian, and Equifax are well-known names in the business credit industry. Although each credit bureau scores items a bit differently, they all emphasize your business’ ability to meet its credit obligations on time.

Business credit scores generally fall within the 0 to 100 range, although a few scales show higher numbers. High scores are regarded as good business credit scores, as they appear to indicate a low business credit risk.

High-scoring companies are given a reduced chance of making delinquent payments. In turn, this designation makes them more attractive to lenders and business partners.

Implications of Substandard Business Credit

If your credit profile contains some inaccuracies, or questionable items that could raise a red flag, you should take them seriously. For example, maybe one of your regular vendors paid you late for the first time. Or, your account has gone to collections because you’re waiting for a resolution on a large order that contained numerous inaccuracies.

These financial issues may have impacted your credit profile in ways that aren’t apparent. At the same time, prospective employees, clients, and industry partners may be evaluating your company in preparation for future employment or business transactions. They may rethink their choices based on potentially erroneous information.

5 Business Credit Repair Strategies

Before you contact a business credit repair service, take five steps to improve your business’ credit profile. Remember that it takes time to see measurable results.

Restructure Your Outstanding Debt

If you’re tight on cash, contact each lender and/or creditor, and negotiate your account repayment terms. In most cases, your debtors would rather revise your payment terms rather than risk losing all of their money if your business filed for bankruptcy.

Address Your Account Delinquencies

Contact your lenders and/or creditors. Ask them to delete any negative reports on your account after you’ve made at least six to nine consecutive on-time payments.

Reduce Your Business Credit Usage

Don’t utilize any more than 30 percent of your total line of credit. For a $10,000 line of credit, for example, keep your credit utilization under $3,000 at all times.

Report Your Credit Line Paydowns

When you drastically pay down a line of credit, report that positive action to the four credit reporting agencies. This helps to counteract any negative marks on your credit profile.

Submit Favorable Trade References

If you always pay your vendors on time, ask them for a letter that emphasizes that responsible behavior. Send those letters to the four credit reporting agencies.

How Business Credit Repair Services Work

With your business’ credit profile impacting several areas of your operations, and so much uncertainty about the records’ accuracy, you’re naturally concerned about resolving potential problem issues. Enter business credit repair companies that offer to solve your credit problems (for a fee, of course).

3 Steps of a Business Credit Repair Cycle

1)  The company asks for copies of your credit report. You’ll obtain the report from the four major credit reporting agencies: Dun & Bradstreet, FICO SBSS, Experian, and Equifax.

2)  Once the company receives the reports, they’ll analyze them with credit repair business software. Next, they’ll create a list of items that should be disputed.

3)  Assuming you’re in agreement on the disputable items, the credit repair service will contact the credit reporting agencies. The service will dispute any inaccurate or questionable items on the report.

How Long Will the Process Take?

The length of the credit repair process depends on your business’ credit profile complexity. If only a few erroneous reports are impacting your credit score, the business credit repair service may be able to resolve them within a couple of months. If you have a long history of delinquencies, however, the process could take at least six months.

Beware of Questionable Credit Repair Practices

Credit repair companies have gained a checkered reputation over the years. Although some credit repair businesses may operate in an ethical manner, others appear to have made unrealistic promises to their clients.

As the Federal Trade Commission states, some companies promise to conceal your bad credit history or even a past bankruptcy (for a small fee, of course). You may even be encouraged to engage in fraudulent entries on credit or loan applications. These practices can get you in serious legal trouble, resulting in fines or even prison time.

How to Identify a Credit Repair Scam

The Federal Trade Commission lists numerous “red flags” that point to a credit repair company’s lack of legitimacy. Most importantly, if the business doesn’t insist on a written contract, they probably don’t engage in ethical business practices.

Signs of a Consumer Credit Repair Scam

In addition, if the company takes any of the following actions, there’s a good chance they’re running a scam operation. For the sake of your legal and financial best interests, avoid any interactions with them. Here are the warning signs:

  • The company wants their service fee before doing any work.
  • The company doesn’t want you to monitor your credit or contact the credit reporting agencies.
  • The company urges you to dispute negative items on your credit report even when you know the information is correct.
  • The company wants you to furnish inaccurate information on loan or credit card applications.

Signs of a Business Credit Repair Scam

As a business owner, you should also note these additional caveats that specifically apply to business credit repair issues. Avoid companies that make the following promises:

  • The company states that they will establish or improve your business credit in under three months.
  • The company does not have a website. If they do have one, there’s no client login on the home page. In addition, there aren’t any ratings, reviews, testimonials, or client feedback on the site.
  • The company boasts about business contacts or network relationships that they’ll use to help improve your business’ credit.

How the CROA Can Protect Your Business

The Credit Repair Organization Act (CROA) provides important protections against credit repair scams. The Federal Trade Commission enforces this law, which requires all credit repair companies to provide explanations on five important issues:

  • The company must issue a written contract, in which they explain your legal rights and list the services they will perform.
  • The company must discuss your three-day “right to cancel” without being assessed any fees.
  • The company must explain how long it takes to obtain results.
  • The company must state the total amount they will charge.
  • The company must explain any guarantees that it offers to clients.

Finally, under the CROA Act provisions, it’s illegal for credit repair companies to lie about the services they can perform for your business. In addition, it’s also illegal for the company to charge you before they’ve actually performed the services your business needs.

Source: https://paymentdepot.com/blog/business-credit-repair/


Everything You Need to Know About Contactless Payments During COVID-19

Contactless payments allow consumers to pay for goods or services without needing to physically swipe a card in a machine or pass the card to another person. By tapping a phone or card on or near a terminal, near-field communication (NFC) enables the consumer to transmit payment information without physically touching anything. For a variety of reasons, U.S. consumers were slower than their global counterparts in adopting the technology, but due to the fear of COVID-19 infection, they are quickly catching up.

A new study from Visa shows that more than two thirds of customers say they would switch to businesses now offering contactless payment solutions. And more than three quarters of consumers say they have changed how they pay due, in part, to the COVID-19 pandemic. The study involved a survey asking 250 business owners around the world their view of business operations in a post-COVID world, as well as a survey of 1,000 adult consumers asking about their payment and shopping habits.

And in a MasterCard survey of 1,000 Americans, 51 percent used contactless payments at the point of sale in March or April 2020, and half of those people said the COVID-19 pandemic prompted them to try the technology for the first time. Roughly half of U.S. consumers told MasterCard they’re using cash less, or not at all, due to the pandemic.

The pandemic rushed U.S. consumers to a place where the rest of the world already lived. In 2018, only 3 percent of cards in use in the U.S. were contactless as opposed to 64 percent in the U.K. and 96 percent in South Korea, according to a study by global management consulting firm A.T. Kearney.

The Federal Reserve’s annual “Diary of Consumer Payment Choice” showed cash, which was the #1 payment method last year, came in second to debit cards this year. Credit cards were a close third place.

Here are just a few points regarding contactless payments:

  • Contactless Payment Most Important Safety Measure
    The Visa survey reports 46 percent of consumers believe contactless payments are the most important safety measure for retailers to provide.
  • Signature Required
    One thing contactless payments cannot help are required signatures. Some retailers are still requiring signatures even in the middle of a pandemic.
  • Public Transit
    Contactless payments allow commuters to speed through a subway turnstile versus waiting in line to load money onto a transit swipe card.
  • Digital Coupons & Loyalty Points
    Some grocery stores still require customers type in their phone number to redeem digital coupons and receive loyalty points despite simultaneously offering contactless payments. One workaround is asking the cashier to type in the number.

Consumers are rewarding businesses that put COVID-19 safety measures at the top of their priorities. With more and more consumers adopting contactless payments in response to COVID-19, businesses who offer the technology are finding an increase in demand.

Source: https://www.hostmerchantservices.com/2020/09/contactless-payments-during-covid-19/


Apple’s Mobeewave Deal Could Turn iPhones Into No-Dongle POS Devices—Just Not Right Away

Apple Inc. has reportedly acquired technology that enables smart phones equipped with near-field communication to act as point-of-sale devices with no other hardware. In the deal, news of which broke as the weekend began, the Cupertino, Calif.-based iPhone maker has bought Mobeewave Inc., a 9-year-old technology firm based in Montreal. The price was not disclosed, though sources contacted by Digital Transactions News say the deal may have closed as early as February and involved a price tag anywhere from $120 million to $150 million.

Mobeewave in October launched with Samsung Electronics Co. Ltd. a capability that allows mobile phones without dongles or other card-reader attachments to process card transactions via an NFC link between a contactless card and the device. In January, it followed up with a service that speeds up onboarding for merchants looking to exploit the capability.

Samsung’s Samsung Pay wallet is a keen rival for Apple’s Apple Pay, and Samsung, through its Samsung Ventures arm, late in January invested $3.5 million in Mobeewave in a Series B funding round. Previous investors include Mastercard Inc., which participated with two other firms in a November 2018 round. Now, the company has fallen into the hands of Apple. Contacts at Apple and Mobeewave did not immediately respond to requests for comment.

Samsung’s wallet works on phones running the Android operating system, while Apple Pay relies on Apple’s iOS. As  a result, observers tell Digital Transactions News it may be some time before Apple can launch a product based on Mobeewave’s technology. “They are likely to abandon the Android/Samsung version, and move it to their own hardware platform,” says a source close to the market for dongle-free mobile acceptance. “Apple will need to have everything moved to the iPhone chipset, that will take time, we heard a year. These efforts usually take a long time.”

Still, the deal may well stimulate interest in and demand for technology that can enable off-the-shelf mobile phones to act as POS devices without the need for additional hardware. Some companies, such as Santa Clara, Calif.-based MagicCube Inc., have refined the concept, known also as Soft POS, further by offering PIN entry as well.

“This deal will only ignite the market for Soft POS. It will help other serious players in this new category,” says the source.

source: https://www.digitaltransactions.net/apples-mobeewave-deal-could-turn-iphones-into-no-dongle-pos-devices-just-not-right-away/


Mastercard Expands Online Search Tool To US, Canada

Mastercard has introduced new tools designed to help small businesses drive online commerce, the company announced Wednesday (June 8).

As businesses try to attract customers to their online and brick-and-mortar stores, Mastercard expanded ShopOpenings.com, an online search tool that tells which shops are open, bringing the search capability to the U.S. and Canada.

The site includes retailers from boutiques to restaurants and identifies merchants that accept contactless payments. ShopOpenings.com is targeted for mobile phone use to support consumers on the go. It is regularly updated to ensure the reliability of the information.

The company also introduced Digital Acceleration for Small Business, a global initiative to deliver insights and resources for small business owners looking to expand their business digitally and build an online presence. The project is being rolled out first in the U.S., Latin America and the Caribbean.

“Businesses large and small are the engine of growth for economies around the world and right now they need our collective support to navigate these uncharted times,” said Jess Turner, executive vice president products and innovation in North America for Mastercard, in a statement.

Leveraging Mastercard insights, the expanded ShopOpenings.com, built in partnership with data analysis company Sixth Sense, provides customers with an updated place to determine which local shops and businesses are open, Mastercard said.

This includes businesses reopening after closing in response to the COVID-19 pandemic.

Last month, Mastercard debuted its Recovery Insights tool that promises to help businesses and governments assess data during the pandemic to make smarter decisions.

The initiative will make some of Mastercard’s insight tools available for free. The company said the tools use data from a pool of information to give the best possible picture of financial health.

On Wednesday (July 7), Landry’s CEO Tilman Fertitta said the U.S. needs federal rules on how businesses can reopen, calling it ridiculous to keep closing and reopening as the virus wanes and surges.

“At some point, the federal government has got to take it away from the states, and you’ve got to have clarity,” he said. “This is so hard on businesses, it’s so hard on our employees.”

Atlanta Federal Reserve Bank President Raphael Bostic said it would be important to look at how much of the economic and job losses would be permanent going forward due to the constantly shifting circumstances.

Source: https://www.pymnts.com/mastercard/2020/mastercard-expands-online-search-tool-to-us-canada/


Discover Says Fewer People Are Opting To Defer Credit Card Payments

With the pandemic, many credit card companies had set up ways for customers to defer paying what they would normally owe. Now, Discover says the amount of payments being deferred dropped 90% from April until early June — a sign that some distress may be easing.

If fewer people are deferring their credit card bills, they’re probably better able to pay them off, said Andrew Davidson at Comperemedia.

“Perhaps they got their stimulus check, perhaps they got unemployment benefits or maybe they even found a job,” Davidson said.

In the long run, Davidson said, it might be better for customers’ financial health to pay off that credit debt instead of deferring payments for longer.

“In most instances, interest still accrues, and so consumers are effectively kicking the can down the road,” he said.

Davidson said it’s also welcome news for the credit card companies when customers come off those deferral plans. That’s because banks don’t have to set aside as much cash in case people default.

Matt Schulz at Lending Tree said banks want to maintain good relationships with customers.

“It’s not just about somebody having a credit card, it’s about somebody having a credit card and then potentially being able to upsell them to a mortgage, or a car loan,” Schulz said.

And, he said, banks can now point out they were willing to cut customers some slack in a time of need.

Source: https://www.marketplace.org/2020/06/10/discover-credit-card-deferred-payments-forbearance/


How to Protect Your Credit Score During COVID-19

IF YOU’RE WORRIED ABOUT protecting your credit score during the Coronavirus pandemic, then continue reading. It isn’t easy to maintain a good score while you’re experiencing a reduction in hours or maybe even a job loss.

But there is some good news in spite of these uncertain times. There are resources and programs for you to turn to for relief. So try to relax and read on to find out what you can do to keep your credit score where it is right now.

How Payment History Impacts Your Credit Score

There are dozens of different credit scores, but they all consider payment history to some degree. Since FICO scores are most often used, let’s take a look at payment history and other factors used by that score.

With FICO scores, there are five factors considered:

  • Payment history: 35%
  • Amounts owed: 30%
  • Length of credit history: 15%
  • New credit: 10%
  • Credit mix: 10%

To have a good credit score, it’s essential to have a low credit utilization ratio. This is the amount of credit used compared with the amount of credit available. For a good score, it needs to be less than 30%. But if you want an excellent score, you should keep it below 10%.

Now, you can see how important credit history is for a good credit score. Paying your bills on time is crucial. Even a 30-day late payment can make your credit score drop like a rock.

But these aren’t normal times, and you might be facing monthly expenses that your reduced income can no longer support. Fortunately, there’s help to protect your credit score. But first, we’ll begin by prioritizing your debt so you know which bills you should pay first.

How to Prioritize Your Debt

Many Americans are struggling to pay bills due to the fallout from the COVID-19 crisis. So many Americans have lost jobs, taken pay cuts or had hours reduced. And if you were already living paycheck to paycheck and you don’t have a sizable emergency fund, then times are especially tough for you.

There are two different types of debt: secured and unsecured. If you can pay some of your bills but not all of them in one month, then the choice is simple. You start by paying secured debts first.

What Are Secured Debts?

These are debts tied to a tangible asset, such as a house or a car. If you don’t pay your mortgage, for instance, you could eventually lose your home due to a foreclosure. Your car loan is similar. Your car might be repossessed if you don’t make your monthly installment payments.

And if you don’t make your payments on time, it also will drop your credit score by quite a bit. The higher your score, the bigger the drop when you make late payments that get reported to the bureaus.

Mortgage relief options. If you can cover your mortgage payment, do so. But if you can’t? Call your lender today.

The Coronavirus Aid, Relief and Economic Security Act became law on March 27. The CARES Act offers relief for federally backed mortgages. Your lender cannot foreclose on you for 60 days after March 18. And if you’ve had a money crisis due to the coronavirus pandemic, you can request a forbearance for up to 180 days.

If your mortgage is backed by Freddie Mac or Fannie Mae, you also won’t incur late fees or have delinquencies reported to the credit bureaus temporarily.

But if your mortgage isn’t backed by the government, your best bet is to call your lender and ask for help. The Consumer Financial Protection Bureau has a guide to coronavirus mortgage relief to help you find the right options.

Auto loan payments. The first thing to do is contact your lender. If you miss a payment or default on your loan, it will stay on your credit report for seven years. The impact on your credit score decreases as the years go by, but right now, your goal is to keep your score as high as you can.

Most auto lenders have announced payment deferral programs, but each lender has its own terms and conditions. The important thing is to call before you miss a payment. That’s the best strategy to protect your credit right now.

And under the CARES Act, your lender can’t file a negative report on you to a credit bureau if you have a payment accommodation in place. But if you’ve missed a payment since Jan. 31, you may have a harder time working out an agreement. Don’t wait to call!

What Are Unsecured Debts?


With an unsecured debt, your lender doesn’t hold any collateral to cover the debt. For instance, credit card debt is an unsecured debt because there isn’t a tangible asset that your lender can take from you.

Other examples include unsecured personal loans, student loans, payday loans and medical debt. The impact of missing any of these payments is similar. If you don’t pay as agreed, your tardiness gets reported to the bureaus and your credit score drops.

Credit card payments. The CARES Act offers temporary credit score protection to those who are unable to make their minimum monthly payments. If your account is currently in good standing, you can ask your lender for a payment accommodation.

Once you have a written agreement in place, your lender won’t report negative information to the credit bureaus right now. This is a huge relief for those who have paid their bills on time and believe their financial health will return.

But the CARES Act won’t help you protect your credit score if you’ve already missed payments or defaulted. So act now and contact your issuers. Let them know your situation and that you want to work out an accommodation to protect your credit.

Aside from the CARES Act, credit card issuers have been voluntarily providing some financial relief, such as allowing you to skip a payment or offering you a temporarily lower annual percentage rate. Call your issuer and find out what your best options are.

Student loan payments. The CARES Act also offers relief for student loans. The Office of Federal Student Aid has taken the step to place student loan borrowers in forbearance, which means you can stop making monthly payments through Sept. 30. Make the payments if you can, but if you can’t, take advantage of this opportunity.

Check with your loan servicer to find out what other relief options might be available. You can also find information about student loans and the coronavirus pandemic at Federal Student Aid.

Unsecured personal loans. Personal loans are installment loans. As with credit cards, credit relief options differ among lenders. There’s also some protection under the CARES Act if you have an accommodation in place with your lender. Again, you need to call and work out a payment plan.

How Long Will the CARES Act Offer Credit Protection?

The CARES Act legislation likely will remain in effect well into the summer and perhaps longer. Right now, just focus on making the payments that you can on secured debt. What’s left over can go toward essentials and payments on unsecured debt.

Yes, there’s still a chance your credit score might suffer before this crisis is over. Having a great score is important, but right now, it’s more important to focus on staying afloat. Once your personal economy is restored and you start paying down debt, your credit score will begin bouncing back.

Source: https://creditcards.usnews.com/articles/how-to-protect-your-credit-score-during-covid-19


Coronavirus Payments Guide: Everything You Need To Know About Switching To Online & Phone Payments

As we face the grim reality of the global coronavirus pandemic, businesses around the world are confronting the enormity of the challenges ahead of them. The need to minimize the risk faced by vulnerable public-facing employees is particularly important.

Thankfully, there are steps many businesses can take to reduce in-person contact. There are ways your business can minimize such exposure by accepting remote payments — both online and over the phone.

Is Cash Still Safe to Handle?

Cash is an efficient means of germ transmission even in the best of times. A Swiss study from 2008 found that, in some circumstances, flu viruses can survive up to 17 days on the surface of cash. Considering the heightened dangers we currently face, preparing your business to accept cashless and card-not-present transactions has never been more crucial. We understand that the nature of certain types of businesses will preclude the possibility of everyone doing this at scale, but there are ways to accept payments from your customers that don’t involve the exchange of cash or even a credit/debit card.

You Can Still Accept Payments From Customers Who Aren’t Present At Your Place Of Business

If you’re considering shutting down your office and switching your business to delivery-only, know that you can get paid without having to send out invoices. Thankfully, you can accept payments both online and, via a virtual terminal over the phone. If you haven’t gone this route in the past, we’ll explain how it works.

Of course, accepting these kinds of payments presents security challenges along with logistical challenges.

Security Concerns For Card-Not-Present Transactions

When accepting payments remotely, you’re responsible for ensuring the security of your customers’ payment information. The key to achieving this is to make sure that your payment system is PCI-compliant.

  • PCI compliance refers to a set of standards established in 2006 to ensure the security of all customer payment information that is sent and received online
  • Some of the practices that will help ensure your business remains PCI compliant include:
    • Use only PCI-validated payment gateway software
    • Don’t store any sensitive cardholder data
    • Use a firewall on your network and computers
    • Never use default passwords
    • Check that your wireless router is password-protected and uses encryption
    • Check your terminals, PIN pads, and computers to ensure that no one has installed rogue software or “skimming” devices
    • Educate your employees about security and protecting cardholder data

If you don’t take the steps necessary to protect your customers’ credit card information properly, you could easily suffer a data breach that puts your customers’ finances at risk — a development which would not reflect well on your business and lead to a general loss of trust in your enterprise.

Accepting Over-The-Phone Payments

Businesses in certain industries are more likely than others to be familiar with the ins and outs of taking payments over the phone. For instance, restaurants often use POS systems that include a feature for taking orders remotely and processing remote payments.

Alternatively, many businesses may find that a virtual terminal is their best option for accepting payments over the phone. For those who don’t know, a virtual terminal is a means of accepting credit card payments without the credit card being physically present. They are typically web-based and involve you entering your customers’ credit card information into a secure web page for processing.

Many POS systems and virtual terminals have a vault feature that keeps your customers’ information stored on file for later use. This allows your customers to simply direct you to charge their card on file when making a purchase. Note that this is acceptable from a security standpoint because the information is not stored on your site or your devices. Instead, it is all encrypted and stored with the processor.

Accepting Online Payments

Paying for goods and services online has become commonplace over the last few decades — although your business may not have experience with how it all works. In this section, we’re going to run through some common scenarios and let you know how to accept online payments in each instance.

Online Restaurant Orders

Most modern restaurant POS software will include online ordering and delivery functionality (along with payment processing, of course). If you have such a system and you haven’t taken advantage of these features yet, contact your POS provider and ask about how you can implement these features.

Retail eCommerce

If you’re running a brick-and-mortar establishment and you’re setting up eCommerce for the first time, your existing credit card processor should be able to help you set up your online eCommerce system.

Invoices & Online Payment Forms

If you’re trying to further reduce the need for in-person exchanges of payment, you can use invoices and payment forms to send custom links to your customers that allow them to enter their credit card information remotely. This has the benefit of being both safer and faster/more efficient than the use of old-fashioned paper invoices and checks

Is Now Really The Time To Switch My Payment Setup?

Clearly, a global pandemic is not an ideal time for any business to be trying to switch up their payment processing system in order to save a few bucks. However, as the established ways of doing business are being upended at a dizzying pace, businesses everywhere will have to adapt in order to both remain viable and protect the health and safety of employees and customers alike.

Source: https://www.merchantmaverick.com/processing-payments-disaster/

For more information on switching to online or phone payments, contact your Sales Agent.