Digital payments are here to stay

It's been a year since the pandemic began, and many in the ATM industry are assessing the overall damage and dealing with the question of how did the pandemic change the payment system?

I think the biggest change in payments is that we saw was the shift to e-commerce and mobile payments, and not just in industries that you would expect, like retail, but in restaurants, convenience stores and even healthcare.

In order to survive, many restaurants pivoted to customer pick-up and even food delivery, necessitating online ordering and payment. Even convenience stores switched to curbside, mobile pickup because people did not want to go into the physical establishment. In healthcare, there was a surge in telehealth visits which again required online payments.

I've seen some incredible success stories of companies that switched to an almost 100% online channel while others faltered. Many were just not ready with their payment systems – they only accepted POS payments and didn't have an e-commerce page, or they had never considered a mobile strategy. But this lack of readiness also extended to the security side of the equation. Even if channels were in place, companies did not have the appropriate fraud and security tools protecting those channels.

It was such a quick shift in how consumers began to pay that I believe in many cases, security fell to the wayside. And the more channel payment options that you add, the more opportunity you provide for fraudsters to breach your system if there is not a cybersecurity program in place or if you are not protecting payment and sensitive data being entered online with technologies such as encryption and tokenization.

The pandemic absolutely accelerated digitized payments. While brick and mortar transactions will come back as more businesses open their physical locations, consumers are now very comfortable using their mobile phone for purchases and quickly going online to order goods and services. And in many cases, those with robust e-commerce and mobile strategies have made the ordering and payment process so seamless and convenient that I believe a subset of consumers will not go back to physical store purchases.

The long-range benefit to this digitization is that consumers are now more comfortable purchasing through different payment channels, and this is great for companies, including small businesses, that may not have a physical location. It is also great for industries like healthcare, where people are now more comfortable with telehealth and paying for appointments online, because both of these aspects will increase efficiency.

The down-side is that I don't believe every company was ready for digitization.

While we have heard a lot about "omni-channel," I don't think industries really understood the importance of providing consumers several ways to pay until the pandemic hit. And those that could not digitize fast enough – well, many are no longer in business.

But e-commerce and mobile are here to stay, as well as contactless payments. These trends are now the norm so companies really need to look at their payment strategy in light of this shift in consumer purchasing if they want to keep their customer base.

Protect 'data in motion'
Bluefin specializes in encryption and tokenization technologies that secure both point—of-sale payments and payments / financial data, PII and PHI entered online. We believe it is crucial that any company doing POS and online business consider the channels where their payment and sensitive data is being entered and devise a strategy to protect that data in motion, which is typically encryption.

Companies need to consider how they protect that data in storage, which is typically tokenization. And then a third consideration will always be consumer authentication — so EMV at the POS and then technologies such as 3D Secure for online purchases.

Cybersecurity is a global issue. The World Economic Forum recently put out its 2021 Global Risks reportwhich ranks cybersecurity as one of the top global risks that we face. This is why it is important to partner with organizations that make technologies and expertise available to their members, as well as partnering with processors, payment gateways and software vendors globally to provide encryption and tokenization solutions through their platforms directly to the client.

I think you are going to see many more partnerships across the payments ecosystem in the fight against cyberattacks because really, it affects all of us – not just the merchants who are hacked, but us as consumers.