The Past and Present of Payment Processing

It may be hard to believe now, but at one point in time, businesses did not accept credit cards. Before the boom of e-commerce, businesses had to determine whether or not accepting credit cards was the best decision for their business. Now, it’s almost unheard of to be a business that does not accept any form of credit or debit for payment. In fact, unless you’re a small farmer’s market or a sidewalk vendor, cash only businesses have become a thing of the past.

With the rise of e-commerce, so came the demise of cash-only businesses. COD (cash on delivery) is no longer a thing unless you’re in the food delivery business. Even then, online payment solutions are favored. As cash-only businesses were pushed into non-existence and pressured into integrating a card payment system, one factor can ultimately be blamed (or thanked) for the change. That factor is technology.

Advances in technology have changed the game of commerce. From cash to credit cards, credit cards to mobile payments, the technology for payment processing is advancing at a high rate.  It’s worth noting that while technology has worked to phase out cash, it’s also working to gradually phase out the necessity of physical credit cards as well.

That’s where the worlds of mobile/app-based payment solutions and cloud payment solutions are introduced. Instead of swiping credit cards at checkouts, mobile wallets have grown in popularity. Mobile wallets such as Samsung Pay and Apple Pay, rely on Bluetooth Low Energy and Near Field Communication to allow users an easier method of payment. Instead of swiping, users of BLE or NFC technology simply hold their device up against a reader and payment is made. This speeds up the line in the same way that credit cards had hoped to speed up the ease of cash business.

Additionally, the introduction of online payment solutions and apps such as PayPal, Venmo (a PayPal subsidiary), and SquareCash make it easier for businesses to provide multiple secure payment options for the consumers; some of which even allow for different levels of transactions, whether B2B or P2P.

Despite the ever-changing world of online payment solutions that consumers have at their fingertips, credit cards do still reign supreme. Credit has even replaced debit as the most preferred method of payment in a 2016 Consumer Payment Survey. While mobile and cloud-based payments are doing their best to reduce credit card usage, it appears that they won’t have the same effect on disrupting credit cards the same way credit cards disrupted the cash flow.