Category Archives: NFC

What Every Small Business Should Know About Accepting Card Payments

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The way in which people pay for goods and services is evolving rapidly. With the traditional cheque looking increasingly outmoded and people carrying smaller amounts of cash in their wallets, there is a growing demographic of consumers for whom plastic is becoming the exclusive payment method of choice.

That even the smallest startup accepts card is now an expectation rather than a convenient extra. For such entrepreneurs, whose chief concern may be trading and building their business, embracing card payment technology can aid in boosting their bottom line. These are some common questions that often arise when retailers are considering offering their customers the option of paying with card.

Do my customers care about what payment method they use?

In short, the answer is ‘yes’. A recent YouGov survey carried out on behalf of CardSave revealed that, 62% of people carry £20 or less in cash on them, yet almost everyone (93%) carries a credit or debit card. On top of that, nearly a third (30%) of the UK public said they had been inconvenienced by a retailer not accepting cards with 16% admitting to having walked out of a shop for this same reason.

Our data shows that people spent an average of £64.27 at small, independent merchants in February – more than three times the amount of cash they carry. When this figure is considered alongside the statistics above, the message becomes clear: businesses not offering card payment as an option are falling short of the expectations of a growing demographic of modern consumers who hardly carry any cash. These merchants risk losing out on important business.

How do I start accepting card payments?

The first step to take is to make an agreement with a card services provider, who will process your business’s card transactions on your behalf.

Startups should be mindful that card service providers vary in the services they offer, the charges they levy and the amount of help and support they will give retailers. The UK Card Association can provide further advice on this topic, but if you are a new business, consider first a service provider that operates with the small business merchant in mind. Choosing one which meets your specific needs will make process simpler and more cost effective.

How can I expect taking card payments to change my business?

Choosing to accept card payments brings benefits above and beyond offering customers another method of payment. Some merchants may feel that, while card payments benefit their customers, they come at a cost to their business. However, while it is true that there are costs involved, such as transaction fees and terminal rental charges, it should be pointed out that banks often charge businesses even more for banking cash and cheques. As charges made by card service provides are relatively small, they will more than likely be offset by the increase in revenue from card-paying customers.

Accepting cards has been shown to change customer spending behaviour. For example, electronic payments allow customers to spend more than the amount of cash they carry in their wallet. This encourages customers to make higher value transactions and impulse purchases: as already pointed out, the average card spend in small retailers is double what consumers carry in cash. Moreover, the convenience and speed of being able to pay by card positively affects customers’ retail experiences, encouraging them to return for further purchases.

Are there any legal or legislative considerations that I must take into account when taking cards?

In accepting card payments, business owners must recognise that they are handling customers’ sensitive personal information and take appropriate steps to ensure that it doesn’t get into the hands of data thieves. The potential fallout from experiencing a data breach can be grave and include fines, loss of credibility and ultimately lost business.

The best way of keeping customer data safe is to become compliant with PCI DSS (Payment Card Industry Data Security Standards), a set of practical measures such as using not writing down a customers’ account details, that must be adhered to in order to achieve ‘compliance’. Cardholder data security is important and businesses can be fined by their card acquirer if found to be non-compliant.

There are card service providers that are specifically geared towards the needs of smaller or independent retailers and startups, and who will explain the steps required to become compliant, in simple, uncomplicated terms. They can provide support with administration and set up the certification appointment to make the process as easy as possible. So don’t be put off if much of the information you read on PCI seems like jargon!

Choosing to accept card payments allows new businesses to tap into a lucrative market and reach a broader range of customers. While there are things to consider before taking this step, they shouldn’t put you off. It is vital that small and independent businesses keep up with consumer trends, and choosing a card services provider that understands the needs and requirements of your business is your first step.

By Clive Kahn, CEO of Cardsave, specialist in card payment solutions for small businesses

NFC: Challenges And Opportunities For Businesses

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Near-field communication (NFC) technology bridges the physical and digital worlds, in a world where convenience is key, and users expect to be able to action tasks at the touch of a button.

In the future, NFC will prove critical to interconnecting the “internet of things” – appliances, cars, houses, TVs and mobile devices. However there are various security challengers to consider, for example when your phone makes contact with another device and they start talking, how does the other device know you meant to tap it? On the other hand, given that NFC brings devices closer to one another, could it in fact be used as means to tighten security?

NFC has already made its way into our lives, with applications such as mobile payments, public transportation, medical record access and event ticketing, being tested in some cities. A more common, everyday usage is swiping an Oyster card against a machine in a tube station. So, how does it work? In the same way that Wi-Fi is a wireless network cable, NFC is a wireless protocol for smart cards; a general-purpose, short-range communications protocol. It allows two devices that are very close together, to “talk” over a short-range wireless link.

In the world of mobility, NFC gives users added functionality and ease of use, and pretty much every mobile vendor is rolling out plans for NFC-enabled devices. ABI Research predicts that by 2016, 552 million handsets will have NFC embedded, meaning that it’s unlikely we’ll even be able to buy a mobile phone without NFC in the near future. With the rise of consumerisation, many NFC pilot schemes are consumer facing, so if mobile vendors building NFC technology want it to take off, they know they will need to really focus on end user requirements. If ABI’s figures play out as expected, NFC is set to become the key enabling technology behind mobile payments, and going further, it could even replace the wallet. However if mobile devices are set to replace physical applications – such as credit cards, ID’s, cash, loyalty cards and business cards – it will be crucial to ensure those devices are secure.

Using a mobile device for mobile payments, the communication between the device and the card reader on the paired system will be completed using NFC, providing a similar experience to that of swiping or inserting a credit card. The simple act of tapping the mobile device will be the main action of giving consent; however in higher risk or expensive transactions, this can be combined with PIN verification. It will be best practice that the sensitive information needed to complete the transaction will be stored on the secure element embedded on the mobile device, and this will likely be central to those transactions that require strong identity proof. The process of a mobile payment is the same as using a chip credit card, in that the infrastructure, other than the card reader on the system it’s talking to, already exists. Mobile devices can be set up to ensure they won’t respond to random requests, but will require a specific app to be running, or some sort of verification to be used before a payment is made. With all this in mind, it’s possible to design a user experience of convenience, whilst making security more robust with a phone than with a card.

NFC is not just used as a transactional enabler, although currently this is one of its most common uses. At a recent Dutch art festival, for example, each installation had an NFC station that attendees could use to rate exhibits with one to five hearts, as well as assemble their own festival poster with the works they liked. There are also various ways in which it’s set to be used as a security enabler, such as using a phone as a car key, or with a door lock that has NFC.

For businesses, there will be further opportunities to use NFC as a means to bolster the security infrastructure and bridge the gap between physical and logical access to corporate environments. For example, when we start seeing NFC in laptops, they will be used as website security management tools. NFC will enable security to be more consolidated, so that employees can use their mobile device to both access buildings, as well as the corporate network. This will reduce the need for smart cards and other physical authentication methods, offering convenience and mitigating the risk of lost or stolen devices.

NFC is used in many different ways, for many different purposes, offering scope and diverse opportunities to do things quicker and more conveniently. It’s certainly changing the ways in which devices interact with one another, and gives users more functionality. However in the future, it will do a lot more than simply enable transactions to happen; it will be used as a means to access critical systems and might even open your front door or your car. This means that there will be less physical elements to worry about – keys, wallets, credit cards – and for businesses, it will serve as a means to bolster the security infrastructure against advanced threats.

By Jon Callas, CTO, Entrust