Technology or Strategy? Find Out About the Next Challenge in Digital Payments

At Evertec®, we believe there should be increasingly more channels for businesses to offer sales or collection options to make the process easier for the end consumer.

The world as we know it has changed; hence, our ability to adapt will determine the success or failure of our future strategies, both personal, professional, and for our business. In this article, I intend to focus on businesses, which have seen how technology has taken on a decisive role in transforming the shopping experience of consumers, driving them into previously uncharted territory. Therefore, it is important to clearly define what are your desired objectives. And once this has been defined, find a partner with experience and vast knowledge in the space you want to play in rather than one that can only offer you additional payment methods. At Evertec®, we believe that the solutions that are in greatest demand include QR codes and payment links. However, you need to first understand that each one of these solutions has a specific use and market segment while still addressing the same need: accepting a card-not-present transaction.

Therefore, when planning your business’s direction with regards to digital payments, it is important not only to define your desired objectives but also to choose a partner that will offer the best end-to-end support and technical capabilities to assist you in the transition to the digital world.

Considering the above, the selected solution will depend on your business strategy. Therefore, it is important to know what the commercially available options are. The QR code, which has experienced a very favorable increase in the rate of acceptance and authorization (compared to devices such as payment terminals), is a great option for small businesses whose transaction volume is not as high, such as weekend businesses, fairs, and other businesses that have a seasonal or variable economic activity. One possible drawback of this method is that it requires the consumer to have a mobile device to scan the QR code. In addition, the business must have internet access, and this is where we find the challenge for the expansion of this payment method.

Organizations find it a challenge to implement and adopt new methods of payment. They seek to turn customers into recurrent users who use their mobile devices to make regular, daily payments, providing them with peace of mind and security to supply the information that is required to complete the payment.

The implementation of payments through QR codes is very simple. Evertec’s PlacetoPay solution provides businesses with a web page, where they can access their store QR code and print it or keep a digital copy on a mobile device or tablet. Each business defines what is the best way to display the QR code to its consumers. An important point is that businesses do not need to invest in new technology for the implementation of this payment method; they only need to show or print the QR code to start accepting payments.

Another payment option that has gained traction, surpassing the QR code at times, is the payment link. This payment method has helped different businesses migrate to sales through social networks and digital platforms, offering their products or services to a much larger audience who don’t even necessarily have banking products.

But one thing is clear, all new payment methods are focused on the use of mobile devices. As consumers, we can store credit cards, debit cards, and other payment methods on our cell phones and use them through NFC (Near Field Communication) technology to make payments. This is known as TapOnPhone, a term that refers to the use of mobile devices that securely capture and store the payment information to then be able to use it at a payment terminal or any device that accepts payments. This payment method only requires the business or entity implementing it to have devices with near-field communication enabled and internet access available.

Increasingly more transactions will be completed in a card-not-present environment. In a world where devices will evolve, and these will force the development of new payment methods that simplify the payment process. The resulting user experience will improve in turn increasing business acceptance.

However, not everything is about innovation. Companies are also responsible for ensuring the security of transactions throughout the process. For this reason, one of the upcoming challenges in 2022, in terms of digital payment security, has to do with the implementation of 3DS protocols, not only for franchised credit cards but also private credit cards. This can be useful for the market, as well as the combination of this type of protocol with algorithms like Evertec’s own fraud prevention tool, Scudo. This tool is integrated into the Placetopay gateway, which seeks to improve transaction approval rates for end users, while reducing friction and increasing security to improve the payment experience for the end user.

In conclusion, it is essential that we understand that the most important challenge for all of us in the payment ecosystem is to be able to improve people’s access to different payment channels and methods. This is a commitment that needs to be made by all parties involved. The same product cannot be used by all sectors. We need to offer products that respond to each group’s needs, because when it comes to a payment solution, consumers should be offered all the tools required to enjoy the experience making it seamless. Therein lies the success of a winning digital strategy.

– by Ricardo García Molina,
General Director of Evertec Medellín

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