The Merchant Bankcard Industry Today; Market Trends; Technology Trends - Ingenico Elite 510 Supplementary Manual

T
HE MERCHANT BANKCARD
INDUSTRY TODAY

Market Trends

• Small merchants have the same requirements as
large merchants – the need to operate efficiently,
the need to serve customers quickly, the need to
lower the cost of payment and the need to avoid
fraud.
• Small merchants need customer relationship
management tools to effectively compete against
other small merchants as well as the large
national retail chains.
• Merchant attrition is a tremendous issue for
financial institutions, processors and ISOs.
Retailers have been "conditioned" to look for
the best price and trouble free service. When a
provider fails to give trouble free service, the
retailer will switch networks very quickly. As a
result, financial institutions and processors lack
the ability to differentiate themselves with other
than price and "issue avoidance".
• Price competition is the primary means of
winning new business, however, pricing is never
a sustainable competitive advantage.
• Processors, financial institutions and ISOs lack
the means to keep in frequent contact with their
merchant customers.
• The primary objective of an EFT POS terminal is
to support the payment process – anything that
delineates from serving the customer will not be
accepted by merchants or those whom directly
support the merchant. However, value-added
services such as messaging, frequency, electronic
gift certificates that complement the payment
processor are positioned for market success.
• Retailers are looking towards their payment
processing provider to update technology for
payment, settlement, and reporting. This includes
Internet access for transaction histories, charge-
back requests and other information that a
retailer would like "on demand".
• Retailers are beginning to request a single image,
regardless of whether the customer shops online
or in the store - integration of the store front and
web based commerce is key.

Technology Trends

• Retailers with integrated payment are slowly
migrating to open systems and industry
standard components such as are used by cell
phones, pagers, palm pilots, ECRs and PCs.
This will lead to adoption of open systems and
industry standards by smaller merchants with
dial payment.
• Proprietary programming languages and
development platforms are giving way to open
environments for EFT POS terminals.
• Smart cards are soon going to make an impact in
our industry – not for stored value as previously
marketed – but for credit and debit transactions
as well as value-added services such as electronic
gift certificate, loyalty and frequency.
• Terminal manufacturers will need to update their
EFT POS terminal offerings to include EMV
approvals if they are going to do business in the
next few years. The leading card associations
will require EMV level I and II approval.
• Terminal manufacturers are examining
technologies such as Bluetooth, USB, touch
screen and TCP/IP – these technologies will
enable processors to implement exciting new
and innovative solutions that help ISOs,
processors and financial institutions churn
the market.
• Processors are going to begin updating
their networks from 1200 and 2400 bps
communication speeds and move away from
outdated protocols to "PC like" speeds and
implement connectivity through DSL and
cable modems.
• Processors will update their communication's
infrastructure to leverage the power and
capabilities of the Internet in a controlled and
orderly manner that adds value to their merchant
relationship and supports the payment function.
3.