While the world is eagerly waiting for the post-pandemic future, consumer habits formed over these two years are likely to stay. Online purchases, contactless payments, and POS terminals have become part of our daily shopping experiences. 

Undoubtedly, customers got accustomed to the new reality and now expect seamless services. In response, merchants have no other alternative than to invest in convenient, efficient, and highly personalised digital services. Moreover, these experiences must spread across the entire shopping journey, from pre to post-purchase.

Though generating income is appealing, collecting money can be a daunting job. The structure of payment processing fees is particularly confusing and costly. And the number of providers is ever-growing, so businesses find it challenging to choose the right vendor.

How do you decide whom to believe and keep expenses low? Below we explain the development of payment processing and the hurdles most businesses encounter. We also share the most common transaction methods and how to select a POS solution that fits your needs.

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Payment Processing Timeline

The history of contemporary payment processing is complex. It is a system that took numerous twists and turns and still changes. Let’s check how we got here.

The Beginning

The first credit cards came out in 1940 when airlines allowed ticket purchasing on credit. A decade later, Diner’s Club launched their card and enabled paying on credit at various retailers. However, stealing cards and pretending to be someone else was super-easy.

Magnetic Stripes

In the 1970s, IBM’s technology allowed information to get encoded but not encrypted on magnetic stripes. And thanks to novel computer equipment, confirming transactions took a few seconds. Still, customers found it hard to trust the system, and chargebacks were tricky.

The EMV Period

Card cloning took off due to the lack of data encryption between cards, points of sale, and networks. To overcome this, the major card network operators (Europay, Visa, and MasterCard) launched the EMV chips in 1993. As a result of two-way authentication, PINs, and data encryption, security gradually improved. Transaction fraud risks lowered, and there was no need for hefty phone authorisations.

E-commerce And Online Payments

Online stores like Amazon and eBay appeared at the end of the 20^th century. At the turn of the millennium, PayPal became the default payment means for millions of users. Other online channels and processing companies also thrived. But despite their popularity, security and fraud issues were still prevalent. Moreover, high payment processing fees tightened the belts of businesses. 

Modern Solutions

Though credit card usage grew worldwide, the rise of mobile payments and e-Wallets has been unstoppable since 2015. The pandemic accelerated the adoption of e-Wallets and dispute resolution services. However, expensive and time-consuming chargebacks remain a headache for merchants.

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Payment Processing And Technology

Advanced technological solutions changed the payment processing landscape forever. Here are the predominant trends:

Contactless Transactions

Cashless payment methods made the shopping experience faster, more secure and convenient. Whether using cards or mobile wallets, clients only tap their card or phone on the payment acceptance device and pay. Plus, mobile wallets use biometrics authentication and thus, add an extra layer of security.

Mobile Points of Sale

A mobile POS can enable businesses to accept payments at any location securely. Whether retailers do checkout at the register, in the lobby or at clients’ homes, POS terminals have become an indispensable segment of all SMEs. Flexible, pocket-sized, and with multiple functionalities, POS systems are an invaluable asset for merchants.

Peer-to-Peer Applications

P2P applications like PayPal and Google Pay have also gained popularity for money transfers. Moreover, they integrate with ridesharing or food delivery apps to enable streamlined purchases. If the trend continues and safety levels increase, merchants will probably pay lower payment processing fees. 

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Merchant Payment Processing Methods In 2022

Let’s consider the latest innovations retailers are embracing to keep up with the demand and allow their businesses to grow. 

BNPL

The Buy now, pay later option allows customers to buy products or services today and pay in instalments. The trend has massive potential because many retailers accept BNPL for any purchase size. The high level of adoption is due to the omnichannel application (online and in-store), flexibility, and loyal youth consumers.

Digital Wallets

Virtual wallets store various payment types, including bank cards, loyalty cards, and all payment information and passwords. Shoppers can access them quickly and pay online or in person at various POS solutions. Experts believe that 4.4 billion consumers will use a digital wallet by 2023, making 52% of global online transactions.

QR Codes

QR codes allow safe and easy payments. Businesses use them in creative ways to attract buyers and drive additional sales. For instance, QR codes help restaurants display menus, take orders, and receive payments without involving a server.

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Biggest Frustrations With Payment Processing Fees

Are you fed up with the ever-increasing expenses your business runs? Fortunately, advanced payment solutions can boost your profit margin without compromising quality and speed.

Payment Integration

Many retailers process payments separately from the rest of their operations. As transactions come in, payment processing fees increase. Plus, merchants enter data manually, resulting in a time-consuming procedure prone to human error. The ideal setup can automate the process and sync transactions with CRM, accounting, and other software you use.

Omnichannel Payments

Charging customers no matter where they are is vital. POS terminals are excellent, but what if you start working online or attend a trade show? A reliable processor will offer a secure payment gateway, a card reader, and mobile payment processing. As a result, you can reduce vendors and costs while saving time.

Processing Charges

Not everyone considers payment processing fees a challenge. For some, this is the cost of doing business. And how much you pay depends on the business type, used cards, payment methods accepted, and transaction size. Many payment processing fees can be negotiable and even avoidable if you hire the right supplier.

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Elly Is The Solution To All Merchant Headaches

Curbing high payment processing fees requires accurate tracking, and choosing a trusted provider can save the day. Elly POS is a highly efficient and all-encompassing solution that overcomes all your challenges. With low rates, continuous support, fast transactions, and settlement times, we can help your business upscale. 

Elly POS allows merchants to accept all payment means, including cards, digital, and crypto. Plus, it features tipping, a docking station, and daily reports for monitoring day-to-day operations.