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The Green Sheet Online Edition

January 09, 2012 • Issue 12:01:01

Research Rundown

Top challenges facing payments in 2012

A survey by Compass Plus conducted during the Cartes & Identification 2011 international payment and digital security conference in Paris revealed that fraud and the rise of mobile and near field communication (NFC) payments are expected to be the biggest challenges facing the payments industry in 2012.

Fraud was the number one concern in 2011 for 31 percent of survey respondents, followed by growth of NFC technology at 27 percent. Mobile and NFC payments eclipsed fraud as the most significant concern respondents anticipate for 2012. Other critical issues cited in the survey were the proliferation of new payment channels and nontraditional payment providers, the ongoing global economic crisis, and regulation emerging in conjunction with the arrival of new payment players.

Of those surveyed, 42 percent believe mobile payments will reach critical mass in two to three years. Regarding NFC payment technology, 29 percent projected mass adoption within two years; 27 percent estimated widespread adoption could take more than four years.

Among potential fraud threats, hacking of Internet banking sites ranked highest for 29 percent of respondents, followed by customer-not-present fraud for 26 percent. Highest-ranking fraud prevention strategies for 2012 were consumer education, 29 percent, and deployment of advanced fraud protection systems, 27 percent.

"The industry is clearly concerned with not only how to deal with new innovations such as mobile and NFC, but also how to guard against fraud as new payment technologies sit side by side with existing ones," said Maria Nottingham, Global Marketing Director for Compass Plus. "The survey results point to a wider trend. The proliferation of new payment technologies and industry players is creating an increasingly complex and competitive industry environment."

She added that "to be successful in such an environment, we believe service providers need to deliver customized, innovative payment services to market quickly and cost effectively without compromising security and reliability."

SMB data security holes

A security threat awareness poll conducted by Symantec Corp. in September 2011 asked 1,900 small and midsize businesses (SMBs) how familiar they are with network security threats and what they are doing to protect themselves against attacks.

SMB network security vulnerabilities

Source: Symantec Corp., SMB Threat Awareness Poll, Global Results

"Historically, there has been some slowing in spending between Black Friday and the last week before Christmas. This year we did not see that occur as consumers kept spending on discounted goods."

- Silvio Tavares, First Data Global Information and Analytics Solutions
Source: First Data SpendTrend Mid-Month Flash, Dec. 21, 2011

New ATM evolution

Dynamic changes in revenue and cost structures have forced financial institutions (FIs) to consider more efficient, customer-centric channels. Mercator Advisory Group's report, The Evolution of the ATM Banking Channel, examines the role of next-generation ATMs for FIs seeking new cost-saving avenues, enhanced customer-focused interaction and technological advances as part of an integrated multichannel program.

Hand-helds no longer back burner

Citing a survey by Hospitality Technology, an Action Systems Inc. white paper, A Decade After Their First Appearance Are Tableside Ordering and Payment Solutions Ready for Prime Time?, states the ability to provide table-side ordering and payment will be the most interesting POS platform innovation for 2012. The paper also addresses how hand-held devices can increase revenue, reduce costs and overcome obstacles associated with fixed-station POS systems.

Small-business RDC strategies

According to the Aite Group LLC report, Small-Business RDC: Strategies for Success, over 50 percent of U.S. banks have deployed remote deposit capture (RDC) technology, yet small-business adoption remains low. Aite Research Director Christine Barry, co-author of the report, said, "Small businesses need RDC, and banks can charge for it. But money is being left on the table due to low adoption levels and less-than-proactive strategies."

end of article

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