Alliance Activities : Publications : The Changing U.S. Payments Landscape: Impact on Payment Transactions at Physical Stores

The Changing U.S. Payments Landscape: Impact on Payment Transactions at Physical Stores

Publication Date: November 2013

This is an exciting time in the U.S. payments industry, with innovation in both payment presentment and acceptance. Significant changes to the U.S. payments landscape affect how merchants accept payments for purchases at physical stores, as well as how consumers interact with merchants to select and pay for products.

Mobile devices now not only support payments but also enable new services that add value for both consumers and merchants. Different payment approaches are starting to remove the requirement for a payment card at the point-of-sale (POS), leveraging cloud-based services or mobile devices. In addition, the U.S. is beginning to migrate to the use of secure EMV contact and contactless technology to enhance security, reduce fraud, ensure global interoperability, and lay the foundation for future innovations in payments.

The Smart Card Alliance Payments Council developed this white paper for the U.S. payments community. The white paper describes payments innovations that affect the physical POS and examines the impact of the pending migration to EMV on these new payment solutions. The white paper focuses on the technologies used by consumers to present payment credentials at a physical POS and by merchants to accept payment.

The white paper provides:

  • An overview of new payment technologies and approaches that are being used for payment acceptance at physical stores, including Near Field Communication (NFC), mobile payment card readers (also known as dongles), tablet POS devices, geolocation, 2-D barcodes, ACH payment, and remote ordering
  • A summary of advantages and disadvantages of each payment innovation and their potential effects on the traditional payments landscape
  • Examples of solutions providers for each technology or approach
  • A discussion of the potential impact of solutions on consumer privacy, transaction security and the merchant POS process
  • An analysis of how EMV migration may affect implementation of new POS systems

While these technology-driven changes are still a small part of the overall payments market, they are altering the way people think about the payment experience. As the payments community moves forward with infrastructure changes and POS system upgrades, understanding key technology trends is critical to implementation of next-generation approaches for payment in the U.S.

About the White Paper

The Smart Card Alliance Payments Council developed this white paper to describe the changing U.S. payments landscape for purchases at physical stores. The white paper reviews new innovations in payment trends and devices, discusses the impact on EMV migration, and offers perspectives on how these trends are changing the way consumers pay and merchants accept card-present transactions. Participants involved in the development of this white paper included: Apriva; Capgemini; CH2M HILL; Chase; Connexem Consulting; CorFire; CPI Card Group; First Data Corporation; FIS; Gemalto; Giesecke & Devrient; Infineon Technologies; JCB International Credit Card Co., Ltd.; MasterCard Worldwide; NXP Semiconductors; Oberthur Technologies; OTI America; Quadagno & Associates; SHAZAM; TSYS; Valid USA; Vantiv; Visa Inc.; Xerox.

About the Smart Card Alliance Payments Council

The Smart Card Alliance Payments Council focuses on facilitating the adoption of chip-enabled payments and payment applications in the U.S. through education programs for consumers, merchants, issuers, acquirers/processors, government regulators, mobile telecommunications providers and payments service providers. The group is bringing together payments industry stakeholders, including payments industry leaders, merchants and suppliers, and is working on projects related to implementing EMV, contactless payments, NFC-enabled payments and applications, mobile payments, and chip-enabled e-commerce. The Council’s primary goal is to inform and educate the market about the value of chip-enabled payments in improving the security of the payments infrastructure and in enhancing the value of payments and payment-related applications for industry stakeholders. Council participation is open to any Smart Card Alliance member who wishes to contribute to the Council projects.