Over the past couple of years we have heard more and more retailers say they want to get out of the payments business. Of course they still want to accept non-cash payments and in fact many want to accept more types of non-cash payments than they do today. They just want to outsource the implementation, maintenance, updates, addition of new payment types and certification of their payments infrastructure.
There are three main forces that have retailers looking to outsource payments: payment card security concerns, increasing payment and payment system complexity, and the increasing time and cost to update and maintain their payment system.
The continued assault on payment systems by criminals and breaches has caused retailers to take a close look at where card data resides in their environment and how to best protect it. To many, this means removing data card from their environment, both in-store and corporate. The industry move to semi-integrated payment terminal integration removes card data from the POS system, containing it only in the payment terminal, or an in-store payment server, or in-store payment application. Many retailers are making the decision to remove card data from their corporate data center by using out-sourced hosted switches, payment switch-as-a-service solutions, third-party gateways, or direct connection from their payment terminals to their processor thereby eliminating card data traversing their corporate networks.
Payment complexity continues to grow at a faster pace. EMV with its debit routing complexity, faster EMV initiatives, and increased certification processes and mobile wallets with advanced functionality requires retailers to become payment experts in order to figure out how to support new payment technologies and methods and manage the multiple vendors involved in their payment infrastructure. Increasingly retailers are asking Verifone to help them manage this payment complexity.
At the same time, the complexity of retail payment systems has and continues to increase ever faster. Payment terminal software, POS software, in-store payment management software and payment switch vendors all need to make lockstep changes to properly maintain and enhance a retailer’s payment system. Encryption and tokenization solutions implemented by retailers to secure card data across multivendor solutions and Omni-channel initiatives add to this complexity. Current payment systems may not be able to cope with the host of new channels on the horizon like The Internet of Things, the Connected Car, Alexa, Waze and social media in addition to new payment types, such as peer-to-peer payments like Venmo, micro-loans like Klarna and international payment methods like Alipay.
The evolving complexities of payment types and systems combine to drive retailer costs up, increase the time to implement changes and reduces the stability and reliability of retailer payment systems. Multiple systems and vendors along the payments infrastructure chain increases system interfaces and integration efforts and adds additional potential points of payment system failure.
As a result, retailers are looking to remove all sensitive cardholder data from their environments, reduce the number of integration and failure points as well as the number of vendors involved in their payments infrastructure, and a number of retailers are looking for one partner to provide their entire payments infrastructure. This has a number of benefits to merchants:
- Simplifies their payment system reducing overall costs and improving reliability
- Enables retailers to be more innovative and to implement new payment types and channels faster
- Improves the security of their cardholder data and reduces the likelihood of a payment breach
Retailers looking to get out of the payments business should look at the Verifone solutions implemented by hundreds of retailers including Verifone’s Point Classic, Point Enterprise, FIPay Enterprise and Hosted RTS.
Payments will continue to become more complex. Verifone is committed to simplifying your payment system and making it easier to add new payment types and channels in the future.