Secure, Swift, Seamless: Why Your Customers Love Digital Wallets
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Consumers want fast, convenient ways to pay for their purchase—without digging through their wallet for their card payment details. Shoppers increasingly say they choose where to shop based on how convenient the online payments process is. One way to enhance your customer experience (CX) and streamline the online transaction process is by offering your customers digital wallets as a payment option.
Digital wallets are gaining popularity—with an expected 5.3 billion users by 2026. They’re becoming increasingly important not just for the benefits they provide customers; businesses that take advantage of this evolving technology soon will be ahead of the game—digital wallet adoption still lags among some types of merchants, despite continued increase in consumer usage.
It’s those ongoing advancements in digital wallets that are exactly why collaborating with a knowledgeable payments provider is essential for organizations that want to attract and keep customers in a dynamic online payment environment.
The Rise of Digital Wallets
Digital wallets are becoming mainstream. They’ve transcended novelty status and become an integral part of everyday life. Consider this: 79% of Gen Z consumers use digital wallets at least once a month. They’re also growing in popularity with Millennials and Gen Xers, half of whom reported using digital wallets more often than traditional payment methods in a recent Forbes survey.
So, we know digital wallets are increasingly popular. But, why?
Customers Expect Fast, Secure, Streamlined Service
Customers crave simplicity. They want transactions to be swift and secure, and they don’t want to take any unnecessary steps. Digital wallets fulfill these expectations by offering:
Fast Processing: With a few simple steps, payments are completed in seconds.
Security: Digital wallets employ robust encryption and authentication methods, providing peace of mind for users.
Reduced Redundancy: Say goodbye to repeatedly entering card details—digital wallets store payment information securely.
Why Offer Digital Wallets?
Meet Customer Expectations
Customers expect to see familiar payment options when they visit your website. Digital wallets have become a standard feature for most consumers, akin to credit cards and bank transfers. By offering a digital wallet option, you signal that your company is attuned to consumer preferences and up to date on the latest technology.
Increase Trust and Security
Trust is the bedrock of any successful business relationship. Customers recognize digital wallets as secure payment methods. Whether it’s PayPal, Venmo, Apple Pay or Google Pay, these platforms have earned their reputation for safeguarding sensitive data. By integrating them into your payment ecosystem, you reinforce trust with your audience.
Streamline the Checkout Process
Offer a frictionless checkout experience: no fumbling for credit cards, no manual data entry. Digital wallets eliminate these pain points. Customers appreciate simplicity—they can complete purchases swiftly, especially on mobile devices. This simplicity also helps your company’s bottom line; consumers who use digital wallets spend 31% more than non-users, according to recent survey data.
Choosing the Right Payment Methods
Quality Over Quantity
While variety is enticing, overwhelming customers with too many payment options can backfire. Instead, focus on quality. Prioritize widely used digital wallets that resonate with your audience. Remember, simplicity is best.
Understanding Customer Preferences
Knowledge is power. By analyzing transaction data, you can discern which payment methods your customers prefer. Do they browse from Apple devices? Then consider offering Apple Pay. Are they connecting using Google Chrome? Google Pay may help you speed up transactions. Armed with this type of insight, you can tailor your offerings and enhance the user experience.
Collaborating with Payment Providers
Now, let’s address the elephant in the room: managing separate accounts with various digital wallet providers. It’s time-consuming and inefficient. Here’s where a payment provider comes to the rescue:
Centralized integration: Partnering with a payment provider allows you to consolidate digital wallet options. Instead of juggling multiple accounts, you have a unified interface.
Seamless updates: When a new digital wallet emerges or an existing one evolves, your payment provider handles the integration and is there to guide you through the process.
Efficiency: Focus on your core business while the payment provider manages the technical intricacies.
Remember, the goal is to enhance your customers’ experience. By offering digital wallets and collaborating with a reliable payment provider, you’re not just streamlining payments—you’re building trust and loyalty.
The future of wallets is digital, and now is the time to claim your spot—ahead of the competition. Incorporating digital wallets isn’t a trend, it’s a necessity to stay relevant and keep customers coming back. Your customers demand speed and convenience; meet their needs by adopting digital wallet technology today. Contact our experts at CSG today.
Think Outside the Square: How QR Codes reshape payments
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From telemedicine to bread baking, there’s a list of things that enjoyed a surge in adoption during the pandemic. For businesses, that includes the use of contactless payments and QR codes—which turned out to be no passing trend.
Previously, QR codes were used mainly for marketing purposes. Now they have found mainstream adoption beyond the pandemic as a tool to facilitate contactless payments. With convenience being a top priority among consumers, QR codes have proven to be a seamless and secure payment method for both businesses and customers alike.
We’ll delve into the benefits of incorporating QR codes into your multichannel payment processes and offer examples on how to effectively implement them, enhancing the payment experience for your customers.
WHAT ARE QR CODES?
QR (short for “quick response”) codes are two-dimensional barcodes that store information in a readable pattern. Traditional barcodes can only hold limited data like product numbers. QR codes, with their added dimension, can store various types of information including URLs, contact information and payment details (e.g., an invoice).
QR codes encode data into a grid of black squares on a white background, which can then be scanned by a smartphone or QR code reader. The scanning device then instantly accesses the encoded information, letting users quickly access websites, make payments or retrieve other information automatically.
You can think of QR codes as a bridge between physical and digital commerce. They offer a quick way to interact with content and perform tasks using a smartphone camera.
TYPES OF QR CODES
The QR codes that businesses use can be split into two types: static and dynamic. Each type differs in content and function.
STATIC QR CODES
These QR codes contain fixed data—the data can’t be changed once the code is generated. You often see these used to contain simple, unchanging information like website URLs, business card details or product information.
DYNAMIC QR CODES
Dynamic QR codes can be modified after creation. They’re often used in conjunction with a web service or platform that lets a user update the content linked to the code. This means the QR code can be personalized to specific users—linking to different URLs or displaying different text. This is why dynamic QR codes are often used in situations that require real-time updating, like marketing campaigns, inventory management and—as concerns us here—payments.
HOW QR CODES WORK IN PAYMENTS
Here, we’ll focus on one of those tasks that QR codes facilitate—initiating transactions—which merchants can use to offer contactless payment at a store or settle an invoice remotely.
Take retail transactions, for example. Merchants can generate QR codes to represent a specific payment amount. At the point of sale, a customer can simply scan a displayed QR code using their smartphone. This usually directs them to a secure payment portal where they can confirm the transaction and choose their preferred payment method—credit/debit card, mobile wallet, bank transfer, etc. The process makes it easy for customers to pay on the go, and merchants don’t need to have a cash register or payment terminal to accept payment.
Beyond retail transactions, QR codes can also facilitate invoicing with reduced friction. Businesses can generate a QR code for each invoice, embedding payment details such as the invoice number and amount due. When recipients receive the invoice, they can simply scan the QR code to access the payment portal, where they can review the details and complete the transaction with a few taps on their device. This streamlines the payment process by eliminating manual entry of payment information and reduces the risk of errors.
Essentially, QR codes are digital keys that unlock seamless payment journeys, whether they involve in-store purchases, ecommerce or invoice payments. They’re versatile and easy to use, making them an appealing tool for businesses looking to simplify their payment processes and improve the payment experience.
EXAMPLES OF QR CODE USE CASES FOR PAYMENTS
As mentioned, QR codes are versatile, and they help customers make quick, secure payments in a variety of ways. Here are just a few examples.
STREAMLINING PAYMENT VIA MONTHLY BILLING STATEMENTS
If your company sends out monthly billing statements, chances are you encourage customers to make payment online or through your app. You can take them straight to a payment portal by printing a QR code on the bill encoded with that URL. This saves the customer time in having to navigate to that portal through several clicks or even having to enter the URL. Not only that, but you can also encode the QR code to include the account number and amount due, which pre-fills the payment information for a faster checkout. It’s a great way to combine a traditional communication channel—the paper statement—with an easy digital payment experience.
ACCEPTING IN-PERSON PAYMENT MORE EASILY
Imagine you’re a field technician installing a new internet router in a customer’s home. As you’re setting it up, the customer shows interest in upgrading to a better router on the spot. With a few taps on your tablet, you quickly generate a personalized invoice reflecting the upgrade cost. Instead of fumbling with cash or card readers, you simply present the QR code on your device screen. The customer scans the code with their smartphone, and just like that, the payment is processed. You install the upgrade then and there, leaving the customer satisfied with faster internet connection. The best part is the QR code ensured payment right away—you didn’t have to invoice them and wait for the payment via the monthly bill.
REPLACING PAPER INVOICES
Suppose you’re a home repair service worker who has just completed a job for a customer. Instead of the traditional route of handing over a paper invoice and waiting for a check, you offer a more secure and efficient payment option: a QR code. The customer scans the code with their smartphone, securely processing the payment electronically. This not only saves time and reduces the risk of errors associated with manual payments, but it also provides a better payment experience by using a modern payment solution.
ADD QR CODES TO YOUR PAYMENT CHANNELS
Incorporating QR codes as a payment channel offers businesses a practical and efficient way to interact with customers. With CSG Forte Engage, our intuitive payments solution, organizations can seamlessly integrate QR codes into their operations, providing customers with personalized and secure invoices for hassle-free transactions. By leveraging QR codes, businesses can streamline their payment processes and enhance customer satisfaction with a secure and convenient digital payment channel.
Take the next step in offering this convenient, secure method and contact us today.
Frequently Asked Questions About Payment Processing
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The digital payments market is projected to reach $16.62 trillion by 2028. All businesses should be familiar with the basics of payment processing to remain agile in a competitive industry and ever-expanding landscape. We’ve answered some frequently asked questions (FAQ) about payments and their processing to help you get started.
Payment Methods
Understanding the terms and systems that go into payment processing gives you the edge to offer your customers frictionless, secure and simple ways to pay. Here are answers to some common questions about payment methods.
1. What Goes Into a Transaction Flow?
The transaction flow consists of various participants and components, including:
Customer: The customer is the individual or organization paying for services or products.
Merchant: The merchant is the service provider or business receiving payment from the customer.
Payment method: The payment method is how the customer pays—via check, credit or debit card, cryptocurrency, or electronic wallet.
POS system: The point-of-sale (POS) system is a digital platform or physical device used for the transaction. The POS system can be on an e-commerce website, app or terminal point at a store.
Payment gateway: The payment gateway safely captures and sends information from the POS system to the acquiring bank or payment processor. This gateway encrypts and secures the data during the transaction.
Payment processors: The payment processor is a third-party company managing the technicalities of the transaction. These technicalities include validating information, receiving authorization, and facilitating communication between the acquirer and issuer.
Acquirer: The acquiring bank, or the acquirer, is the financial institution where the merchant’s account is. The acquirer receives payments on behalf of the merchant, processes transactions for the merchant and settles the funds in the account.
Issuer: The issuer or issuing bank is the financial institution that authorizes or declines the transaction on behalf of the customer. Issuers consider customer account status, the validity of the transaction and available funds.
Card network: The card network includes organizations like Mastercard, Visa and American Express. These organizations provide the infrastructure, rules and standards for processing transactions.
ACH network: The Automated Clearing House (ACH) network is used to move money between bank accounts in the United States electronically. Nacha, previously called the National Automated Clearinghouse Association, runs the ACH network and ensures the payment system is safe and efficient. Transaction types include business-to-business, consumer and government transactions.
Payment security: Payment security consists of a range of technologies and standards to ensure transactions are secure from breaches and unauthorized access. Security involves encryption, tokenization and compliance with the regulations set by the Payment Card Industry Data Security Standard (PCI DSS) Council or the ACH network for bank-based payments.
Settlement: Settlement and reconciliation are the processes of transferring funds from the issuer to the acquirer and updating the transaction records to reflect the funds transferred.
2. What Is Payment Authorization?
Payment authorization is when the issuer verifies that the customer has the available funds and confirms that money can be released from the customer’s account. The issuing bank conducts thorough checks before authorizing transactions.
3. What Are Payment Settlement and Operations?
Payment settlement starts with customer payment initiation and ends once the funds are deducted from the customer’s account and paid to the merchant.
During settlement, the issuing bank verifies the transaction details and authorizes money to be debited from the customer’s account and credited to the merchant’s account. This settlement communication operates through the payment network.
4. What Are the Needs and Considerations of E-Check and Credit Card Payments?
E-checks and credit card payments have a few key differences:
E-check payments: The Automated Clearing House (ACH) merchant network processes e-check payments between participating financial institutions. E-checks are categorized as electronic funds transfers (EFTs). They work like ACH transfers with routing and account numbers, facilitating funds transfer between accounts. Electronic checks can save your business on payment processing costs—they’re typically more affordable than card transactions.
Credit card payments: Card authorization occurs when the merchant accepts a card payment and the payment processor reaches the card issuer. The issuing bank ensures the credit card is valid, verifies the transaction amount and available funds, and does security checks. The issuer will deliver a two-digit code approving or declining the transaction. Credit card transactions are convenient for customers, especially those who prefer to have a range of payment options.
5. What Are the Top Digital Wallets and How Do They Work?
The top digital wallets in North America include:
Apple Pay
Google Pay
PayPal
Venmo
Digital payment wallets use software that links your payment details from your bank account to the vendor you’re paying. Some apps offer open wallets that allow contactless online and in-store payments.
Electronic wallets make payments easy for customers—there’s no need to keep card details on hand to pay, and the information is stored in one central, protected location.
6. What Does Accepting On-Site Payments With Devices and POS Entail?
If you want to accept on-site payment with POS systems and devices, you need the associated hardware and software. You’ll also need a payment solutions provider.
The necessary hardware includes a card acceptance machine, like a POS terminal. The hardware connects to software that processes transactions via the provider’s solution. POS terminals can accept several types of payments, including contactless payments, credit and debit cards. Customers can tap, swipe and insert cards depending on their preferences.
Processing Models
Processing models allow transactions to happen between the issuer and the acquirer. Here are the related questions answered.
1. What Is a Payment Gateway?
A payment gateway links all entities involved in a transaction and helps systems communicate with each other. Payment gateways establish secure connections to transmit data and process the transfer of funds from the customer’s account to the merchant’s to complete payment.
2. What Is an Enhanced Payment Gateway?
An enhanced payment gateway is a robust version of a standard payment gateway. This solution goes beyond processing payments, leveraging advanced fraud detection capabilities. Enhanced payment gateways may also feature subscription billing and customizable checkout options.
3. What Is an Acquired Payment Gateway?
An acquired payment gateway is a payment processing solution offered by a payment service provider. This solution lets you securely receive customer payments using online wallets, debit cards and credit cards. The gateway handles authorization, transaction processes and the transfer of secure funds into your account.
4. What Is a Payment Facilitator?
A payment facilitator (PayFac) simplifies the setup of payment processing for your business, allowing you to accept in-person and online payments. The PayFac has a master merchant account. Your business becomes a sub-merchant under the PayFac, eliminating the lengthy underwriting process. The PayFac enters a contract with the acquiring bank and manages the approval process on your behalf.
5. What Does It Mean to Be a Third-Party Sender?
A third-party sender (TPS) facilitates ACH transactions by having funds flow through its account. Third-party senders act as intermediaries, making payments on behalf of customers. This approach provides little protection in terms of risk management and adherence to safety standards. A TPS typically comes with higher transaction fees because of the higher involvement in the flow of funds.
6. What Is the Difference Between a Third-Party Sender and a Third-Party Service Provider?
A third-party sender directly receives and transmits funds through its bank account on behalf of a company. A third-party service provider does not hold funds and transfers funds to ACH network users.
When third-party senders pay on behalf of a client, the risk involved tends to raise the price. A TPS solution can also cause customer onboarding friction.
Leveraging a third-party service provider (TPSP) offers greater security, as these entities strictly adhere to regulations and don’t automatically move money. You’ll also benefit from faster processing times, better customer onboarding, flexible transaction limits and lower transaction fees.
Pricing
Payment processing pricing is also an essential consideration for your business.
1. What Is an Interchange Fee?
Interchange fees make up the majority of payment processing fees. You pay interchange fees to financial institutions that manage the customer’s card payments. These are standard charges that come with the convenience of using a specific payment method.
2. What Is Pass-Through Pricing?
Pass-through pricing includes interchange, assessment and payment processor fees. These fees are typically itemized or combined monthly on a statement for a merchant to pay. Pricing structures differ, so it’s important that your business partners with a competitively priced payment solutions provider.
3. What Is a Flat- or Fixed-Rate Model?
A flat- or fixed-rate model charges your business the same processing fee percentage regardless of the card used. The flat-rate percentage is typically based on the cards with the highest interchange rates.
4. What Is a Convenience Fee?
A convenience fee is an additional credit card or online payment charge. It’s sometimes charged by a payment processor when a customer does not pay by cash, check or ACH. It can be applied as a split charge or split fund.
5. What Is a Split Charge?
With a split charge, the payer sees two entries on their statement—one for principal and another for convenience.
6. What Is a Split Fund?
Merchants can set up predefined splits to go to different bank accounts. Split funds come in handy when your business charges convenience fees that need to go to a separate account from the transaction amount. Debit and credit funding bank accounts are usually set up this way for merchants.
CSG Forte offers split funds and handles the setup to ensure hassle-free allocation.
Integrations
Integrated payments connect your POS system to a payment processor, offering streamlined transactions.
How Does Integration Impact the Payment Experience?
Integrated solutions enable you to offer a better payment experience. Customers can pay using various methods without the need for different payment terminals or manual processes, making transactions frictionless.
Payment tokenization is a security measure that uses unique tokens instead of transmitting sensitive payment data during transactions. These tokens protect information like banking details, primary account numbers (PANs) and credit card numbers.
2. What Is the Payment Card Industry Data Security Standard?
PCI DSS is a set of standards requiring all businesses that handle credit card or payment information to maintain a secure environment. These compliance standards apply to all organizations, no matter the size of your business or the amount of transactions it handles.
3. What Are the Top Considerations for Nacha Compliance?
Secure payment transmission and storage of sensitive information.
Store hard copies of documents with customer information safely.
Validate customer routing numbers.
Guard against possible fraud.
Verify customer identities.
Outline and enforce an official security policy.
4. What Is End-to-End Encryption?
End-to-end encryption (E2EE) is a way to safeguard your customers’ data during transactions. This encryption prevents data breaches and unauthorized access to sensitive information like credit card or bank account details. Sensitive information is encrypted and securely transmitted from one point to the next, allowing your customers to pay you safely.
The payment gateway performs the encryption when the customer initiates the payment, and it decrypts the information when it reaches the acquirer.
5. What Is Point-to-Point Encryption?
Point-to-point encryption (P2PE) is an encryption method established by the PCI DSS Council. It offers excellent protection, using an algorithm to encrypt card information when the customer initiates payment. The unreadable code is transmitted to the payment processor with a decryption key. The decryption happens virtually, so your business never comes in contact with customer payment information.
While P2PE and E2EE are similar, the PCI DSS Council only accepts point-to-point encryption.
Ready to Streamline Your Payment Solutions?
CSG Forte will help you scale your business rapidly and make payments frictionless for you and your customers. Each year, we help process over $84 billion of payment transactions.
The Automated Clearing House (ACH) is a network that clears funds moving from one bank account to another. When a payer transfers money via debit, credit card or EFT, the funds await authorization. Once clear, the ACH system moves the funds into the payee’s account.
The National Automated Clearinghouse Association (Nacha) oversees this network in the United States. Nacha employs rigorous security measures to guard users’ accounts. Outside its security nexus, bad actors who gain access to pertinent information can commit ACH fraud. This type of fraud is relatively common—a criminal only needs access to a few details to open the door to several opportunities for theft. Preventing access at the start is better than remedying a security breach.
What Is ACH Fraud?
ACH fraud occurs when criminals use account and routing numbers to impersonate victims and manipulate the movement of funds. Criminals can obtain routing numbers at the bottom of their targets’ checks. They might use this information to impersonate someone and steal funds through various methods:
Internal fraud: When an employee of a company uses legitimate credentials to make unauthorized ACH withdrawals and payments, the fraud is considered internal.
ACH kiting: Kiting occurs when fraudsters move funds from one company account or financial institution to another.
Fraudulent authorized push payments (APPs): When a customer attempts to pay you, criminals trick them into making ACH transactions prompted by scams, and the funds never reach your account.
Unauthorized access to personal accounts: ACH transactions render you and your clients vulnerable to unauthorized persons having access to sensitive accounts.
Unauthorized ACH withdrawals: Merchants and clients risk having funds withdrawn from bank accounts without authorization.
Within the ACH network, there are several steps between a payer sending funds to an account and the payee receiving the funds. This process is not impenetrable to criminals, who are using more sophisticated means of defrauding unsuspecting users. Traditional ACH systems lack proper security mechanisms, leaving you and your end users vulnerable.
ACH Fraud and Concerns
Concern is mounting over the rate at which ACH fraud is increasing, highlighting the need for more vigorous security methods. Criminals only need two data sets to successfully steal money through the ACH network—a bank account number and a bank routing number. Businesses and enterprises accepting payments need to address increasing ACH fraud to protect themselves and end users.
ACH fraud can occur from external means or inside a company. Employees don’t need to know complicated data sets or complex codes to hack a business or another person. Staff are also at risk of social engineering and phishing attacks.
How ACH Fraud Can Affect Your Business
A U.S. District Court recently found a credit union liable for not acting on several suspicious ACH transactions. If you’re a business accepting payments or overseeing financial transactions, it’s critical to be proactive in preventing ACH fraud. Nacha and the Federal Reserve Regulation E have policies that state the consumer is not responsible for ACH fraud unless they fail to report an incident within 60 days.
Financial institutions can be held liable, with the bank returning the funds to the consumer and claiming them back from the original enterprise. Successful fraud protection can keep your end users safe and protect you from the costs of fraudulent ACH activity.
CSG Forte’s Approach to ACH Fraud Prevention
CSG Forte has extensive experience in ACH fraud prevention and detection, and our robust payment platform provides reliable, secure solutions. For your convenience and safety, we adapt to the evolving digital economy to provide a unified payment solution with built-in fraud-prevention protocols using the latest technology.
Furthering your peace of mind that your funds are handled safely, we’ve partnered with Nacha, the body overseeing all ACH transactions. You’ll also benefit from:
Advanced security protocols: Your data stays protected with our advanced security solutions, such as Forte.js and compliance with major card brands.
Real-time alerts: You can remain in control of your funds by monitoring transactions in real time and receiving alerts for every activity connected to your funds.
Comprehensive evaluation: We thoroughly evaluate merchant accounts to prevent delays down the line and help you accept payments seamlessly. Evaluation helps ensure your payment system will have adequate ACH fraud protection, mitigating loss in the long run.
We bring you reliable, safe payment processing solutions. Our approach to fraud prevention is comprehensive, as we’ve partnered with several leading software providers to prevent money laundering and several types of sophisticated financial crimes.
Key Features of Our ACH Fraud Prevention
To secure every payment and keep your data safe, CSG Forte develops every software platform and application tool with security as the cornerstone. The key features of our ACH fraud prevention include:
Software to detect behavioral anomalies: You can have peace of mind knowing our behavioral analytics software detects discrepancies from your usual activity and alerts you in case of an anomaly.
End-to-end encryption: We use end-to-end encryption technology to safeguard all data and prevent your information from leaking to a third party.
Tokenization: We limit the exposure of your sensitive information through tokenization, ensuring your data remains hidden in the system throughout the payment process.
We are committed to providing you with rigorous, up-to-date security systems for your enterprise, as evidenced by our compliance with several security programs. You can rest assured your funds are protected during every transaction.
Protect Against ACH Fraud With CSG Forte
ACH is a vital payment method to offer your customers. However, its attainability makes it vulnerable to breaches. Protecting your funds and your customers takes a proactive stance. Take action by integrating an advanced, robust platform from CSG Forte.
P2PE vs. E2EE: What’s the Best Payment Security Option for Governments?
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If end-to-end encryption (E2EE) and point-to-point encryption (P2PE) sound like they could be the same thing, you’re not wrong. Technically speaking, P2PE is a specific type of E2EE, and the objective in both uses is to secure cardholder data from the time it’s captured until it reaches its intended destination.
However, only one of these methods offers significant time savings and cost benefits to the government agencies that use them. Read on to understand the differences between E2EE and P2PE and why choosing P2PE could be in your department’s best interest.
What Is P2PE?
As the ongoing threat of data breaches continues to menace government agencies of all sizes, securing cardholder data remains a top priority. In recent years, P2PE has become the gold standard for credit card payment security compliance.
Here’s why: Payment card industry (PCI)-validated P2PE is a set of standards defined by the PCI Security Standards Council (SSC) that outlines a comprehensive set of best practices spanning the device supply chain, encryption key loading, configuration, encryption and application security.
The P2PE process creates a secure connection between devices, or components within devices, which prevents possible sensitive data from being exposed at any point while moving across a network. It effectively removes cardholder data from an agency’s environment, providing better protection for the cardholder.
How Does P2PE Work?
P2PE encrypts cardholder data immediately upon receiving a card payment. It sends this encrypted code directly from the payment terminal to the payment processing system, where the information gets decrypted using a secure key.
Since the decryption takes place entirely in the payment processor, the government entity never sees any of the cardholder’s information. If hackers manage to intercept the data while it’s in transit, they will not be able to read the data because only the processor possesses the key—there’s no chance someone can steal the key from the government agency or any other transactional party.
PCI P2PE Compliance Requirements
P2PE reduces the likelihood of PCI compliance breaches by directly connecting the payment terminal to the processing system—and correspondingly drops the number of self-assessment questionnaire questions from over 300 to around 30. This function means your department can raise the bar on security without also increasing the compliance audit burden.
Some other key compliance requirements include:
The data must be encrypted at the payment terminal.
The payment terminal may only use P2PE-approved applications.
The merchant must conduct annual inventory checks on payment terminals.
The merchant must install cameras with a clear view of the terminal.
Ultimately, these requirements are fairly easy for most agencies to manage, leaving more time and scarce resources to spend on the purpose and passion at the forefront of your day-to-day dealings rather than the processes behind each transaction.
Remove liability issues: Forte Protect merges processes, applications and payment devices to securely encrypt and protect data during transit from the POI terminal/device or POS system
Protect cardholder data: Our solution has three parts—validated hardware, validated software and validated solution providers to cover payment terminals, terminal application, deployment, key management and decryption environments.
Save time and money: With a minimal per-transaction cost, Forte Protect saves your agency PCI-related costs by reducing PCI scope. This is because the number of questions from the self-assessment questionnaire (SAQ) drops from SAQ D (329 questions) to SAQ P2P3 (33 questions).
Fully integrate existing payment channels: Supported card input methods include tap, dip, swipe, keyed, Apple Pay, Samsung Pay and Google Pay. Your constituents’ payment experience will be seamless without you lifting a finger!
We put data security at the core of all our payment solutions, so you can rely on Forte Protect to keep constituent data safe through every payment—every time. In addition to meeting PCI standards, we’re certified for compliance with ISO 27001:2013, SSAE SOC 1 and the Health Insurance Portability and Accountability Act (HIPAA). Whatever your agency needs, we can help you protect constituents from data breaches.
What Is E2EE?
Many government transactions rely on E2EE, a process that involves an indirect link between the payment terminal and processing network. During this operation, the processor or a third party is expected to encrypt cardholder data (CHD) during transit.
Unfortunately, the indirect link means card present transactions—where the user swipes, dips or taps their card—are a constant area of concern. Preventing fraud at the terminal isn’t just a matter of checking who is presenting the card. You also must ensure the payment terminals themselves are secure. By intercepting POS devices or using insiders, malware loaded to a device can scrape and transfer cardholder data available in its memory.
That’s why rather than finding new ways to protect cardholder data, businesses are looking for ways to eliminate cardholder data from their environments.
E2EE and PCI Compliance
Some agencies using E2EE claim that using doing so makes adhering to PCI guidelines easier because it encrypts data throughout the entire process, but this claim isn’t entirely the case.
While this method is compliant with PCI guidance, E2EE requires intensive documentation and additional ongoing costs associated with PCI compliance. Agencies often hold the encryption keys, so merchants relying on E2EE will typically need to complete an annual PCI DSS SAQ with over 300 questions.
Even though local and regional governments are used to wearing many hats, assuming responsibility for PCI compliance may be more than many can handle. If government agencies choose to have someone else manage PCI compliance on their behalf, like processors or outside consultants, they’ll also incur the added expense of outside help.
What’s the Difference Between P2PE and E2EE?
While they are similar in nature, some of the most significant differences between P2PE and E2EE include:
Security rules: P2PE and E2EE require different security checks on and around the payment terminal. For example, P2PE requires merchants to perform annual terminal inventory checks to ensure everything works properly.
Control: Because the scope for PCI compliance is much smaller with P2PE, merchants have greater control over their ability to adhere to the standard. E2EE, on the other hand, contains more endpoints, making compliance more complicated.
Liability: P2PE providers take complete liability for data breaches because they hold the keys. With E2EE, though, the merchant has control over decryption keys and can be held liable for stolen cardholder data.
Ultimately, these differences mean the best choice for most government agencies that are planning to accept credit card payments is P2PE. It makes compliance more manageable and keeps cardholder data safer than E2EE—and it’s entirely possible with a reliable provider like CSG Forte. If you want to improve your payment processing technology, consider using our solutions to secure your card transactions.
Choose P2PE Payment Solutions from CSG Forte
The numerous controls and security implemented across this entire value chain make P2PE an extremely secure encryption method—but also a high bar for providers to clear. Only a select few offer PCI-validated P2PE today, and we’re proud to be one of those few.
Million Dollar Payments: Nacha Boosting Same-Day ACH Maximum
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Think of your favorite news outlet, any news outlet. Chances are, if you visit their site right now, the leading topic will be the economy. From inflation to new job numbers, several metrics and topics are commonly discussed when analyzing the economy. However, the Automated Clearing House (ACH) network often goes overlooked in economic discussions. And it definitely shouldn’t—with over 7.5 billion payments valued at $18.9 trillion in the fourth quarter of 2021 alone.
With payment volumes and values continuing to grow, new rules are needed to foster the growth of the ACH network. The National Automated Clearing House Association (Nacha), an organization that governs and facilitates the ACH Network, develops standards and rules to ensure the ACH Network operates smoothly, and that payment information transfers securely and quickly.
In response to substantial increases in ACH payments, Nacha announced a rule that will increase the same-day ACH spending limit. Beginning March 18, 2022, businesses will be able to transfer same-day credit and debit payments up to $1 million, up from the current $100,000 cap.
And with more verticals likely to adopt this because of the increasing amount of payments they can accept, there’s never been a better time to start offering this payment option. Get paid faster, lower payment processing costs and easily manage recurring payments.
Choose CSG Forte for Same-Day ACH Payments
CSG Forte is the leading payments provider of same-day ACH, supporting over 73,000 merchants. With a best-in-class solution and decades of experience, we deliver a scalable and seamless solution to companies operating in a wide variety of verticals, including integrated software vendors (ISVs), healthcare, property management, government, insurance, enterprises and utility organizations.
Our payments platform can turn what was once an operational expense into a revenue generator through our revenue optimization solutions. Our platform optimizes ACH payments by validating payments in real-time, automatically re-presenting failed payments and keeping recurring payments on track.
Want to learn how you can optimize your ACH payments and take advantage of the rule change? Click here to learn more.
5 Payment Trends to Watch in 2022
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Human beings have an innate need to make predictions. For whatever reason, we like to make forecasts on just about everything, from Oscar winners to World Series champions, from election results to the likelihood of weather events, and everything in between.
The most effective prognosticators tend to take a 360-degree view. That is, they try to eliminate blind spots and take multiple factors into account. The recent past can give us a good idea of where things are heading moving forward.
In the payments world, the COVID-19 pandemic sent shockwaves throughout the industry that continue to reverberate. Today, we are seeing innovative breakthroughs in new digital payments technology, with rapid adoption across a wide range of industries. On the flip side, there are more opportunities for hackers and bad actors to try and take advantage.
Where is the payments industry headed? While I don’t claim to be Nostradamus, there are a few major trends I believe will dominate the payments headlines in 2022.
1) Digital Payment Methods Transform (and Explode)
The past few years have shown consumers that there are more ways to pay than just checks, cards and cash. As a result of the pandemic, contactless payments adoption has surged. Today, more than half of all Americans use at least one form of contactless payments (mobile apps, contactless cards, etc.). And consumers are letting merchants know that they expect more digital payment options—57 percent say they are more likely to do business with a merchant that offers a contactless payment option.
New payment methods will continue to attract first-time users in 2022, such as virtual credit cards, which provide consumers with alternative credit card numbers to disguise their sensitive information when making online transactions. There are a number of reasons virtual credit cards are an alluring prospect: they are environmentally friendly, incredibly secure and easy to monitor. They also empower the customer by allowing them to set spending limits and expiration dates. Just like with contactless, once buyers use a virtual credit card, they’ll demand the option moving forward.
2) Tighter Payment Security
An unfortunate byproduct of the rise of digital payments is the increase in digital payment fraud. eCommerce fraud grew to more than $20 billion in 2021. As security threats loom over merchants and consumers alike, more advanced fraud prevention will become a necessity.
In the next year, multifactor authentication (MFA) will become more commonplace. MFA has three types of authentication factors—biometric identification, device in-use and traditional password. Just as consumers are used to opening their smartphones with a quick press of the thumb, consumers will get used to using MFA for purchases.
In 2022, consumers will have the ability to set up multiple layers of security while making purchases in real-time. When a consumer is using a credit card at their local market, they can instantly receive a message to confirm their purchase. In the time it takes to glance at a screen, the transaction is confirmed to be safe. These additional levels of security can drastically reduce the risk of fraud, a tremendous benefit to both consumers and merchants.
3) Better Bill Pay
Bill payment is the one guaranteed touchpoint your customer will have with your business every month or quarter, and since these interactions are guaranteed, there’s a great opportunity to make them stand out.
In 2022, we predict that businesses and merchants will level up their bill payment processes, from offering customers payment methods like PayPal to establishing recurring payments so customers can set it and forget it. In fact, almost 40 percent of consumers prefer to pay their bills through automatic checking account deductions or credit/debit charges. By offering more convenience and choice, companies can make ordinary bill payment experiences extraordinary.
4) Companies Will Offer More Financial Flexibility
The last few years have highlighted the importance of flexibility—in how we work, interact and communicate. Now, consumers have come to expect flexibility in their payment terms. With the rise of apps like Klarna and Affirm, companies are embracing the “buy now, pay later” option, letting consumers pay off purchases in installments rather than one single payment. On the flip side, consumers can also customize when they get paid, with some prepaid debit cards and even financial institutions developing early payday options. In some cases, early direct deposit allows consumers to receive their paychecks into their accounts up to two days early.
Large financial institutions are beginning to adopt these new technologies to create a pipeline of young consumers who place a premium on flexibility, convenience and financial freedom. I anticipate the increased implementation of financial flexibility in the next year as a tech-savvy generation continues to push institutions to reinvent their business to keep pace with digital transformation.
5) Recurring Payments Will Keep Going (And Going, And Going…)
Nobody likes to waste money—especially on something as avoidable as late fees. For that reason, many consumers have embraced recurring payments for regular charges, including cable, utility and rent bills. The notion of having to pull out a checkbook and pay bills monthly is outdated—and this trend will spread to the B2B space.
Unfortunately, payment failures can stand in the way of a successful recurring payments strategy. Payment failures can lead to customer churn, bad debt and a diminishing bottom line. Businesses are increasingly embracing automation when it comes to their payments, including recurring payments. B2B companies that embrace payment modernization can avoid failure and effectively set and forget their recurring payments.
Want to learn more about how payment security can make 2022 your best (and safest) year yet? Download our 3 Steps to Ensure Payments Security here.
Power to the People: Digitized Payments Make Payments Safer and Easier
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The first electronic payment may have debuted in 1871, but digital payments have really shown their worth in the last 18 months. They have presented an ultra-secure, convenient and hygienically safe way to make payments without physical contact. Recent surveys show that digital payments are here to stay— 45 percent of US adults say they are likely to use digital or contactless in-store payments regularly in a store after the pandemic.
What Are Digital Payments
Consumers are increasingly growing accustomed to digitized experiences. With a few taps of a smartphone, a pizza can arrive on their doorstep within a half-hour—no phone call, cash or physical contact needed. Digital experiences also offer an extra layer of safety during an ongoing pandemic. As low touch and digital experiences become more ubiquitous, consumers have come to expect them to be available, especially when it comes to payments.
Payments play a pivotal role in the customer experience—and contactless payments give consumers a safe, secure and easy way to pay. According to Forbes’ State of Contactless Payments 2021 report, when all other factors are equal, consumers will choose a store that offers contactless checkout over one without contactless. In terms of staying competitive, digital payments are no longer a nice-to-have—they are a must.
Convenience— When asked why they wanted contactless options, 2% of respondents cited convenience as their primary reason for using contactless payments. Contactless payments remove the need for PINs or signatures.
Security— Contactless payments featuring RFID and NFC-enhanced technologies are secure, especially when paired with an enterprise-grade POS terminal with advanced security.
Choose CSG Forte for Digital Payment Solutions
From managing employees to balancing the books to creating an exceptional customer experience, merchants have more than enough to worry about—partnering with a payments provider with the right solution helps. At CSG Forte, we offer a full suite of solutions to make digitizing payments scalable, secure and convenient.
Our V400C Plus device makes contactless payments easy. The device was designed with merchants and their customers in mind—with enhanced features including a color touchscreen interface, wi-fi connectivity and thermal printing, merchants can smoothly conduct transactions and provide an exceptional customer experience.
The V400C Plus can be used as a standalone device, be connected to a point-of-sale application, or seamlessly integrate with CSG Forte products. Merchants can accept every major credit card, as well as mobile wallet payments, like Apple Pay and Google Pay.
Combined with our cloud-based platform Dex, merchants can gain insights into what payments customers prefer and allow them to easily manage the entire transaction lifecycle.
Contactless payments were on the rise before the pandemic—COVID-19 has merely accelerated its momentum. When powered by the right technology, merchants can satisfy customers and boost revenues by offering secure and convenient contactless payments.
Cryptocurrency: Explain it to me like I’m 5
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If you were paying any attention to rumblings in the payments industry in the mid-2000s, you probably heard someone say the words “Bitcoin,” “cryptocurrency” or “blockchain.” Following these utterances, you probably met the stare of the person talking to you with either a blank look or a look of skepticism, as you probably connected these terms with the dark web and nefarious purchases.
Now, cryptocurrency, and Bitcoin in particular, is becoming more mainstream – even if many Americans are still confused by the mysterious world of digital currencies. Many skeptics consider digital currency to be a speculative bubble. Some consider cryptocurrency to be the future of payment processing. Either way, let’s hop into the discussion to explain what exactly cryptocurrency is and why it should matter to you.
What is a Cryptocurrency?
Cryptocurrency is the general name given to represent different digital coins. Many people are most familiar with Bitcoin, but there are various altcoins that compete with Bitcoin in different ways. Ethereum, Ripple and Litecoin are some major altcoins you may have heard of (but there are others in the market).
Ethereum, Ripple and Litecoin operate a bit differently from Bitcoin. Bitcoin operates off a blockchain, which essentially is a digital ledger of all transactions that occur with the specified cryptocurrency. To put it really simply, the blockchain is managed by ledger-keepers, who are also called “miners.”
While trying to explain the inner-workings of blockchain gets super technical (just think really, really big computers with lots of processing power), just know the ledger-holders must all agree on any changes to the blockchain for every transaction. This keeps everything (the ledger, your transactions and so on.) accurate and secure. For Bitcoin miners, they can earn a specific number of Bitcoin just by keeping track of the transactions that occur – also commonly called “mining.”
How Does Cryptocurrency Work (and why do people like it)?
Cryptocurrency is founded off the idea of decentralization. Unlike most payment options to-date, cryptocurrency has no general need for the intermediary, i.e. the banking system. This intermediary system has been integral in maintaining the integrity of our monetary system.
Banks, especially when it comes to digital transactions such as stocks and non-cash transactions, help validate transactions. This is especially helpful in preventing “double-spending” in which a transaction is replicated, primarily through error or from a matter of hacking. The claim that Bitcoin makes, however, that that the blockchain system is more secure than any banking system, processes transactions faster than any bank can dream and gives the transactional authority back to the person who holds the money.
Cryptocurrency in its essence is a peer-to-peer method of transacting business – and it’s for this reason that cryptocurrency got a bad rap in some circles. People who have been in-the-know about cryptocurrency remember the coins being used to fund dark web transactions and other (sometimes illegal) enterprises. No longer is this the main use case, however. Now, people who own Bitcoin and other altcoins can use their money to purchase items found on the common market.
Whether you believe that cryptocurrency is just a flash in the pan of the payments industry, or you believe cryptocurrency to be the future of our global economy, most can agree that it’s an exciting time to witness the volatility and growth of these digital markets.
5 Payment Trends To Watch For In 2021—And Beyond
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If we’ve learned anything in the last year, it’s that human beings have a remarkable capacity to adapt to rapidly changing and challenging circumstances. Some of the changes introduced in the last year will likely go by the wayside (sorry, elbow bump). But other changes, like digital payments, will become part of the post-COVID normal.
While the adoption of digital payments was on the rise before the pandemic, COVID-19 has acted as a major accelerator. Accenture estimates that approximately 420 billion transactions worth $7 trillion are expected to shift to digital by 2023.
Anticipating Payment Trends in 2021
Old-School Habits Will Turn Into New Payment Preferences
We all have stories about someone we know changing a long-held habit during the pandemic—an uncle using online banking for the first time or a grandparent ordering groceries online. While digital payment options aren’t new, their adoption has surged over the past year—digital wallet adoption jumped from 38 to 55 percent during the pandemic. As consumers get used to the speed and convenience of digital payments, options like digital wallets and contactless payments will become the new normal.
Tokenization Takes Off
Tokenization, or the use of non-decryptable data that acts as a substitute of a sensitive data element, plays a major role in ensuring that payments are secure. It helps reduce risk from data breaches and provides customers with a sense of confidence in the safety of their financial information and property. As more payments are made online, the use of tokenization will become more of a focal point for merchants and processers. The future of tokenization is bright—one forecast believes that the worldwide tokenization industry will reach $4.8 billion by 2025.
No Contact, No Problem
Many individuals, merchants and government agencies used contactless payments for the first time during the pandemic and found them to be efficient and intuitive. In fact, the usage of tap payments in the United States rose by approximately 150 percent in March relative to the prior year. Today, more than half of Americans are using at least one form of contactless payments. Not only are contactless compliant with social distancing guidelines, but they are also secure and flexible. Even as restrictions associated with the pandemic subside, consumers will continue to expect contactless payment options.
More Governments Modernize the Citizen Experience
The pandemic upended workflows for not only the private sector, but for government agencies as well. When the pandemic hit, state and local governments rushed to keep government business progressing and revenue coming in. Governments have accelerated their adoption of new, flexible ways of operating, including accepting online and ACH payments for the first time and supporting bill payment through interactive voice response (IVR). Now that these stop-gap measures have been widely implemented, governments will need to keep moving forward with more digital offerings.
Fraud Prevention Measures Will Be Tested
An unfortunate byproduct of the pandemic has been an increase in fraudulent activity. According to the Association of Certified Fraud Examiners (ACFE), 79 percent of respondents had observed an increase in fraud since the start of the pandemic. As a full economic recovery is expected to take years, we are likely to see an increase in fraudulent payments in the short to medium term. E-commerce businesses are particularly vulnerable to fraud. Payment processors will be tested by bad actors looking for vulnerabilities and will need end-to-end encryption and a secure token data vault to reduce risk.
This past year’s disruption has conditioned us to expect the unexpected. If there is anything positive to be found when looking back at 2020, it’s individuals’ and companies’ ability to adapt amidst adversity. Absent having a crystal ball, it’s impossible to know exactly where the payments industry is headed moving forward. But we can expect that payments will be more flexible, modern and digital.
