Category: Financial Services
March 3rd, 2014 by Elma Jane
Interchange is a word that’s talked about a lot in the payments industry. If you didn’t have to pay interchange fees, what would your business spend the money on? At its most basic, interchange is the fees businesses pay to credit card processors to swipe your credit and get paid – or the cost of moving money. Businesses are sick and tired of paying high fees and getting very little in return. Customers are sick and tired of seeing prices of items tick upwards as businesses are forced to charge more to cover the cost of interchange.
Businesses spend an exorbitant amount of money each year to accept credit cards – to the tune of $50B. Businesses could reinvest the money they’ve been spending on interchange to better connect with customers, enhance marketing initiatives and grow faster and smarter. Just imagine for a second the economic stimulus the country would get if all that money was put back into the business to drive growth, or back into the pockets of customers to lower costs.
In the past 30 years, interchange fees have mainly gone in only one direction: up. Luckily, things are starting to change, and I think we’re going to start seeing interchange being driven down. The days of a 3 -or 4-percent interchange rate are beginning to look numbered and here’s why:
Competition
There are nearly 200 players in the mobile payments space, with more entering daily. New opportunities are providing businesses with alternative payment options that are outside of Mastercard and Visa’s clutches. While there might be 1,000-plus credit card processing companies, they’re all based on the Mastercard/Visa rails, which provides a fixed floor. But not so with many of these new payment options. As such, traditional methods of payment (cash, credit cards) are facing an increasing amount of competition, and merchants are starting to pay attention.
It’s unlikely that cash and credit cards are going away anytime soon, but it only takes a small shift in volume (maybe 5 percent) for the card issuers to start paying attention. There are a number of ways for them to react, but if history is any guide, one of them will be to start lowering their prices. Alternatively, they could find ways to offer more value to their merchants. Either way, competition is offering merchants new ways to accept payments, and this will lower fees over time.
Innovation
The second thing driving down costs for merchants is rapid innovation, and like a good deal of innovation these days, much of it is centered around mobile. Mobile payments are starting to gain significant traction among consumers, accounting for $640M in 2012 and expected to have grown by an additional 234 percent in 2013.
QR codes, NFC, peer-to-peer payments, card emulation – the list of new technologies trying to disrupt the payments space goes on and on. These new alternatives are challenging the current payments system and shedding light on the opportunities for businesses. This innovation is beneficial in two ways. The first, as discussed above is that more competition will naturally drive costs down. The second is that alternative payment options are focusing on value beyond the transaction.
There are new payment options out there that provide tangible information, such as data analytics, which help companies drive sales and increase revenues. New options are allowing small businesses access to the same technology and analytics that were previously reserved for big-box retailers or e-commerce sites only. These additional value propositions not only help businesses, they also provide new ways for payments companies to monetize, removing the need for them to make all of their money from interchange. With two (or more) revenue lines, lowering interchange is suddenly a lot more feasible.
Legislation
The Durbin Amendment is designed to introduce competition in the debit card processing network and limit fees for businesses. For all of its unintended consequences, Durbin legislation is actually helping to drive down interchange; it’s opening up competition for non-card-brand network players and lowering debit card fees. While it is certainly rife with controversy, this amendment is opening up new ways to move money that will, over time, contribute to a less expensive payment processing ecosystem.
Merchant demand
Business owners are smart and savvy. They pay attention to trends, focusing on finding new ways to set their business apart. Business owners are also conscious of ROI, and how much they’re spending to attract and retain customers. They understand there is some cost to accept payments, but are becoming more and more frustrated at the high swipe fee costs from traditional credit card processors and minimal return for those fees.
Businesses are looking to new, innovative solutions to provide more than just payment processing – they want to understand and better connect with their customers. In short, merchants are ready for a new payments ecosystem, and where there’s this much demand from a group this big and influential, a solution can’t stay away for too long.
Interchange rates are not going away entirely in the near future, although it will happen eventually. A lot of powerful wheels are in motion to significantly reduce the interchange rates that merchants currently pay. Right now the impact might be small, but it’s growing quickly. In a few years, 3- to 4-percent interchange could be relegated to the same bit of history as $1.99 international phone calls.
Posted in Credit card Processing, Electronic Payments, Financial Services, Gift & Loyalty Card Processing, Internet Payment Gateway, Small Business Improvement Tagged with: accept credit cards, accept payments, alternative payment, credit card processing, credit card processors, credit cards, debit card processing network, e-commerce, interchange, interchange fees, interchange rates, lowering debit card fees, lowering interchange, Merchant's, Mobile Payments, payment processing, payments, payments industry, swipe your credit card
March 3rd, 2014 by Elma Jane
A solution for mobile commerce will be needed eventually, whether you’re an ecommerce merchant or you run a brick-and-mortar shop.
There are mobile payment platforms for digital wallets, smartphone apps with card-reader attachments, and services that provide alternative billing options. Here is a list of mobile payment solutions.
Boku enables your customers to charge their purchases directly to their mobile bill using just their mobile number. No credit card information, bank accounts or registration required. The Boku payment option can be added to a website, mobile site, or app. Price: Contact Boku for pricing.
Intuit GoPayment is a mobile credit card processing app from Intuit. It accepts all credit cards and can record cash or check payments. Intuit GoPayment transactions sync with QuickBooks and Intuit point-of-sale products. Intuit GoPayment works with iOS and Android devices and provides a free reader. Price: $12.95 per month and 1.75 percent per swipe, or 2.75 percent per swipe and 3.75 per keyed transaction.
iPayment MobilePay is a mobile payment solution from Flagship Merchant Services and ROAMpay. The service accepts all major cards and can record cash transactions. To help build your customer database, the app completes customer address fields for published landlines. The app can handle taxes, tips, and can record transactions offline. You can use the service month-to-month. The app and the reader are free. Price: $7.95 per month; Each transaction costs $0.19 plus a swipe fee maximum of 1.58 percent, or a key fee between 1.36 and 2.56 percent.
ISIS mobile commerce platform enables brick-and-mortar stores to collect payments (via an NFC terminal) from the mobile devices of their customers. Provide your customers with a simplified checkout process through the contactless transmission of payments, offers, and loyalty integrated in one simple tap. Price: Isis does not charge for payment transactions in the Isis Mobile Wallet. Payment transaction fees will not be increased by working with Isis.
LevelUp is mobile payment system that uses QR codes on smartphones to process transactions. Use LevelUp with a scanner through your POS system, or use a standalone scanner with a mobile device. You can also enter the transaction through the LevelUp Merchant App, using your smartphone’s camera to read the customer’s QR Code and entering the amount to complete the transaction. LevelUp also provides tools to utilize customer data. Price: LevelUp charges a 2 percent per transaction fee. Scanner is $50; tablet is $200.
MCX is a mobile application in development by a group of large retail merchants. Details on the solution are vague, but MCX is intended to offer a customizable platform that will be available through virtually any smartphone. MCX’s owner-members include a list of merchants in the big-box, convenience, drug, fuel, grocery, quick- and full-service dining, specialty-retail, and travel categories. Price: To be determined.
mPowa is a mobile payment app to process credit and debit card transactions, and record cash and check sales. mPowa will soon launch its PowaPIN chip and PIN reader for the EMV (“Europay, MasterCard, and Visa”) card standard. (Developed in Europe, EMV utilizes a chip embedded in a credit card, rather than a magnetic strip.) The EMV standard is likely to gain footing to combat credit card fraud. mPowa is a good solution for merchants with a global presence. Price: 2.95 percent per transactions, or .25 percent or $0.40 per transaction when used as a current processor’s point-of-sale system.
PayAnywhere is a solution to accept payments from your smartphone or tablet with a reader. It features an automatic tax calculation based on your current location, discounts and tips, inventories with product images and data, and more. Bilingual for English and Spanish users. PayAnywhere provides a free credit card reader and free app, available for iOS and Android. Price: 2.69 percent per swipe, 3.49 percent plus $0.19 per keyed transaction.
PayPal Here gives you a variety of options for accepting payments, including credit cards, PayPal, check, record cash payments, or invoice. With PayPal Here, you can itemize sales totals, calculate tax, offer discounts, accept tips, and manage payment email notifications. Available for iOS and Android. The app and reader are free. Price: 2.75 percent per swipe and 3.5 percent plus $0.15 per manually-entered transaction.
Square is a simple approach to mobile credit card processing. Square provides a free point of sale app and a free credit card reader for iPhones and iPads. Square offers a selection of tools to track sales, taxes, top-purchasing customers, and more. Square’s pricing is on the higher end, but with no monthly fee Square may be a good fit if you have infrequent mobile transactions. Price: 2.75 percent per swipe and 3.5 percent plus $0.15 per manually-entered transaction.
Posted in Credit card Processing, Credit Card Reader Terminal, Credit Card Security, Digital Wallet Privacy, e-commerce & m-commerce, Electronic Check Services, Electronic Payments, EMV EuroPay MasterCard Visa, Financial Services, Internet Payment Gateway, Mail Order Telephone Order, Mobile Payments, Mobile Point of Sale, Near Field Communication, Point of Sale, Small Business Improvement, Smartphone, Visa MasterCard American Express Tagged with: accepts all credit cards, alternative billing, Android, bank accounts, brick and mortar, check payments, contactless transmission, credit and debit transactions, credit card reader, credit-card, database, Digital wallets, ecommerce merchant, EMV, free app, iOS, itemize, keyed transaction, mobile commerce, mobile credit card processing, mobile payment platforms, mobile site, mobile transactions, nfc terminal, point of sale, process transactions, qr codes, record transactions offline, smartphone apps card-reader attachments, transactions
February 18th, 2014 by Elma Jane
Payment Tokenization Standards
Tokenization is the process of replacing a traditional card account number with a unique payment token that is restricted in how it can be used with a specific device, merchant, transaction type or channel. When using tokenization, merchants and digital wallet operators do not need to store card account numbers; instead they are able to store payment tokens that can only be used for their designated purpose. The tokenization process happens in the background in a manner that is expected to be invisible to the consumer.
EMVCo – which is collectively owned by American Express, Discover, JCB, MasterCard, UnionPay and Visa – has announced that it is expanding its scope to lead the payments industry’s work to standardize payment tokenization. EMVCo says that the new specification will help provide the payments community with a consistent, secure and interoperable environment to make digital payments when using a mobile handset, tablet, personal computer or other smart device.
Key elements of EMVCo’s work include adding new data fields to provide richer industry information about the transaction, which will improve transaction efficiency and enhance the consumer and merchant payment experience by helping to prevent fraudulent card account use. EMVCo will also create a consistent approach to identify and verify the valid use of a token during payment processing including authorization, capture, clearing and settlement.
EMVCo’s announcement follows an earlier joint announcement from MasterCard, Visa and American Express that proposed an initial framework for industry collaboration to standardize payment tokenization. EMVCo says it will now build on this framework with collective input from all of its members and the industry as a whole.
Posted in Credit card Processing, Credit Card Reader Terminal, Credit Card Security, Digital Wallet Privacy, Electronic Payments, Financial Services, Payment Card Industry PCI Security, Visa MasterCard American Express Tagged with: American Express, authorization, capture, card account numbers, clearing, data fields, device, digital payments, Digital Wallet, Discover, EMV, emvco, fraudulent card account, interoperable, jcb, MasterCard, merchant, mobile handset, payment, payment processing, payment token, secure, security standards, settlement, smart device, specification, standardize, tablet, token, tokenization, transaction, visa
February 17th, 2014 by Elma Jane
Discover’s Free FICO Service
Executives across all industries have begun forsaking consumer input when designing products. it’s not a customer’s job to know what they want.
Julie Loeger, senior vice president of brand and acquisition at Discover, has found success by bucking this recent trend. Launched just one year ago, Discover’s it Card – a credit card that comes with no late fees, no over limit fees and no APR penalties for late payments, was crafted precisely to meet the desires of increasingly demanding credit card users.
This November, Discover once again illustrated its ability to put consumer needs front and center with the announcement that it would begin providing cardholders with free FICO credit scores as part of their monthly credit card statements.
A lot of information, and what consumers wants to do is share that information to help them achieve their financial goals and personal goals.
The result was an overwhelming positive response that led Loeger and her team to put together a program that included FICO scores, while keeping the end-product simple and straightforward.
One year after the Discover it Card was introduced, and one month after the launch of its FICO service, a regrouped with Loeger for a conversation that revealed new insights into what consumers are looking for in the market and what Discover has learned about marketing successful card products.
Posted in Financial Services, Visa MasterCard American Express Tagged with: apr penalties, card products, cardholders, credit scores, credit-card, dicover, fico, financial services, late fees, late payments, over limit fees, statements
February 3rd, 2014 by Elma Jane
The migration to cards that use chips instead of magnetic strips, known as EMV technology, is well underway in the U.S. No government regulation is needed to make it happen. But the EMV migration and the Target breach are different things. It’s true that EMV chip cards can prevent criminals from producing counterfeit cards using stolen account numbers. But EMV doesn’t stop criminals using stolen cards online. So innovators are deploying new technologies to deter other forms of fraud.
Headline-grabbing events inevitably lead to calls for new laws. But in the case of our nation’s electronic payments systems, new government mandates would stifle marketplace innovations that hold great promise for providing consumer benefits and reducing criminal activities.
Financial institutions compete for customers by providing consumer protections even beyond requirements of current law. Many retailers also offer customers speedy transactions, such as “sign and go” and “swipe and go” for small transactions, while the payments industry ensures consumers still have zero liability. These protections and flexibility are why U.S. consumers are going cashless and carry more than one billion debit and credit cards. More than 70% of retail purchases are made with electronic payments, and our member companies process more than $4 trillion in electronic payments each year.
Fraud accounts for fewer than six cents of every $100 spent on payments systems – a fraction of a tenth of a percent. U.S. companies have made significant financial and technological investments, building sophisticated fraud tools that insulate consumers from liability. To build on this, Congress should foster greater international law enforcement cooperation to fight cybercrime, particularly in countries that harbor crime rings, and replace 46 divergent state breach notification laws with a uniform national standard.
The private sector is best positioned to address the constantly shifting tactics of criminals, and it is doing so without government mandates. Do Americans really want the government in charge of the security and monitoring of our payments?
Posted in Best Practices for Merchants, Credit card Processing, Credit Card Security, Electronic Payments, EMV EuroPay MasterCard Visa, Financial Services, Visa MasterCard American Express Tagged with: counterfeit cards, cybercrime, data breach, debit and credit cards, electronic payment systems, electronic payments, emv chip cards, emv technology, fraud, liability, magnetic strips, migration, online, security and monitoring of our payments, small transactions
January 30th, 2014 by Elma Jane
As many as 40 million Target customers hacked over the holidays when thieves got into their credit and debit card. If you shopped at Target between November 27 and December 15 while thieves were hacking data, you’re unlikely to lose a dime. Federal law and industry practices protect virtually all customers from any liability for fraudulent charges. So many breaches occur in the first place. Credit and debit card fraud has nearly quadrupled in the past decade, hitting $11.3 billion in losses worldwide last year. That hurts profits and raises the cost of goods. The U.S. accounts for more than its share of fraud, and hardly a month goes by when there isn’t a breach from some large U.S. retailer, in part because the U.S. lags other countries in card security.
After the Target breach, the stolen account information flooded underground markets that operate on the Internet, selling batches of data that allow thieves to counterfeit cards and shop till they drop. The best thing that could happen is if this latest megabreach forced the industry and Congress to fix some of the system’s most troubling vulnerabilities.
Cyberthieves are growing more sophisticated, and nothing can prevent every data breach. But when a company as big as Target can be hacked for 19 days to the tune of 40 million records, consumers deserve more modern and tougher protections.
Some ideas for curbing cybercrime:
Put stronger protections on debit cards. Credit cards carry the gold standard in protection against having to pay for fraudulent charges. Federal law limits losses to $50, and most issuers take that down to zero. After a data breach, debit cards are similarly protected. But if your debit card is lost or stolen, by law you could lose up to $500, and reimbursement may depend on how quickly you report the loss. There’s no sound reason for the gap. It should be eliminated.
Set federal standards to protect data. The industry, led by Visa and MasterCard, has always provided its own security standards to keep data safe. Obviously, they’re not working. Federal standards could help, especially if backed by sanctions for flouting them. The Federal Trade Commission has some authority, but the law is nearly 100 years old, and some companies have challenged the agency in court. Since the Target breach, several senators are calling for more federal authority.
Get with the 21st century. The U.S. is far behind Europe, which almost a decade ago replaced the magnetic strip on cards with a digital chip that prevents thieves from counterfeiting cards with stolen data. That’s one reason the U.S. has become a mecca for hackers. The U.S. industry is migrating to these “EMV” cards, but it has moved slowly. The players fight among themselves over everything from who pays to the type of security. Requiring cardholders to use PIN numbers would provide the best security. Whatever the decision, the industry needs to get moving to meet a self-imposed 2015 deadline.
Posted in Best Practices for Merchants, Credit Card Security, Digital Wallet Privacy, Electronic Payments, EMV EuroPay MasterCard Visa, Financial Services, Payment Card Industry PCI Security, Visa MasterCard American Express
January 23rd, 2014 by Elma Jane
Commonwealth Bank of Australia (CBA) will now offer the embedded payments service to customers that use the Samsung Galaxy S4 and have CBA’s mobile banking app. MasterCard indicated that this development allows these customers to make payments at more than 1.6 million PayPass-enabled merchant locations around the globe.
MasterCard is just one major issuer that views embedded chips in NFC-enabled phones as the key to unlocking mobile payments globally. But, its news yesterday of how it is going to leverage its Samsung partnership puts a bit of a different spin on digital wallets and mobile payments.
“Our focus is on helping consumers shop and pay in a way that best fits their needs, across all of their devices,” Mung Ki Woo, group executive of mobile and industry alliances at MasterCard, said in a December 11 statement.
The move is part of MasterCard’s continued relationship with Samsung. Earlier this year, MasterCard teamed with the handset maker to offer exclusive deals and special discounts to Samsung Galaxy S4 users in Bangladesh.
Posted in Electronic Payments, Financial Services, Mobile Payments, Mobile Point of Sale, Near Field Communication, Smartphone, Visa MasterCard American Express Tagged with: commonwealth, devices, Digital wallets, embedded payments, make payments, MasterCard, merchant, mobile banking app, Mobile Payments, nfc-enabled phones, paypass, Samsung, shop and pay
January 21st, 2014 by Elma Jane
A “cryptocurrency” is a peer-to-peer, decentralized, digital currency. Cryptocurrencies offer the potential for merchants to one day break the stranglehold of credit card processing fees. Cryptocurrencies are a disruptive technology that should be actively followed and considered. After all, online commerce is itself a disruptive technology.
Bitcoin
Bitcoin’s high cryptographic security allows it to process transactions in a very efficient and inexpensive way. You can make and receive payments using the Bitcoin network with little or no fees, and without a merchant account. Payments are made from a wallet application, either on your computer or smartphone, by entering the recipient’s address, the payment amount, and pressing send. To make it easier to enter a recipient’s address, many wallets can obtain the address by scanning a QR code or touching two phones together with NFC technology. Market Cap: $10.6 billion (12.1 million coins).
Bitcoin is the first implementation of a cryptocurrency, which was first described in 1998 by Wei Dai and specified by Satoshi Nakamoto in 2009, establishing a decentralized form of money that uses cryptography to control its creation and transactions. New Bitcoins are generated by a competitive and decentralized process called “mining,” the process of spending computing power to process transactions, secure the network, and keep everyone in the system synchronized together. The number of new Bitcoins created each year is automatically halved over time until Bitcoin issuance halts completely with a total of 21 million Bitcoins in existence.
Feathercoin – is based on Litecoin’s Scrypt-based hashing algorithm for GPU mining, rather than requiring Bitcoin’s expensive ASIC mining hardware. Feathercoin uses advanced checkpointing to provide additional security through a form of centralization without having to redistribute the Feathercoin software. At mining completion, 336 million coins will be produced. Market Cap: $11 million (26.2 million coins).
Litecoin – is based on the Bitcoin protocol, but differs from Bitcoin in that it can be efficiently mined with consumer-grade hardware. Litecoin provides faster transaction confirmations and uses a mining proof-of-work algorithm to target the regular computers with GPUs — graphics processing unite — most people already have. Litecoin provides a mining algorithm that can run at the same time on the same hardware used to mine Bitcoins. The Litecoin network is scheduled to produce 84 million currency units. Market Cap: $731 million (23.9 million coins).
Megacoin – raises the most red flags among this list of cryptocurrencies. Launched just six months ago, fifty percent of the total coins have been mined. Upon mining completion, only 42 million coins will exist. Its branding might lead an investor to believe it is associated with billionaire Kim Dotcom’s Mega.co.nz, but there is no connection. If you are interested in monitoring the fate of the more speculative cryptocurrencies, this is one to watch. Market Cap: $15.3 million (21.2 million coins).
Namecoin – is based on the Bitcoin source code. A cryptocurrency, Namecoin also acts as a DNS, a decentralize domain name system to buy, register, configure, and sell domains. The first project using Namecoin is the .bit domain. Market Cap: $44.4 million (7.4 million coins).
Peercoin – is a cryptocurrency project forked from Bitcoin that strives to achieve energy efficiency and increased security. Like other cryptocurrencies, initial coins are mined through the more commonly used proof-of-work hashing process. However, unlike other coins, as the hashing difficulty increases over time, users continue to be rewarded with coins generated by the additional proof-of-stake algorithm. Unlike most cryptocurrencies, Peercoin does not have a fixed money supply. Market Cap: $90.1 million (20.9 million coins).
Primecoin – is the first cryptocurrency with non-hashcash proof-of-work. Primecoin’s proof-of-work is based on searching for prime number chains, providing potential scientific value in addition to minting and security for the network. Similar to Bitcoin, Primecoin enables instant payments to anyone, anywhere in the world. It also uses peer-to-peer technology to operate with no central authority. Primecoin is also the name of the open source software that enables the use of this currency. Market Cap: $13.8 million (3.5 million coins).
ProtoShares – are used to mine Distribute Autonomous Corporation (DAC) backed cyrptocurrencies while they are still in development by Invictus Innovations. DACs are essentially automated businesses that perform services. And so ProtoShares are stakes in future cryptocurrency platforms. Cryptocurrencies under development are BitShares for asset trading and DomainShares for domain services. Protoshares will achieve a maximum supply of approximately 2 million coins in 2 years. BitShares money supply will be about 20 million coins. Market Cap: $23.1 million (1.1 million coins).
Quark – is a cryptocurrency that focuses on enhanced security, using nine separate rounds of encryption and six different algorithms. Quark is mined by CPU only, with 247 million mined in the first six month and then an additional 1 million units mined every year. Quark coin will continue to release coins in perpetuity at an inflation rate of .5% per year. Market Cap: $47.4 million (246.3 million coins).
Worldcoin – seeks to become the cryptocurrency of choice for merchants and consumers for their everyday transactions. Transactions are fully confirmed in about 60 seconds. Due to frequent block generation (30 seconds), the network supports more transactions without a need to modify the software in the future. At mining completion, 265 million coins will be produced. Market Cap: $20.6 million (35.2 million coins).
Posted in e-commerce & m-commerce, Electronic Payments, Financial Services, Internet Payment Gateway, Mobile Payments, Near Field Communication Tagged with: asic mining, bitcoin, credit card processing, cryptocurrencies, cryptocurrency, cryptographic security, decentralized, gpu mining, hashing algorithm, make and receive payments, merchant account, nfc technology, online commerce, payment amount, peer-to-peer, process transactions, QR code, wallet application
January 21st, 2014 by Elma Jane
Myths about seniors abound. Among them are that most seniors are poor, they don’t shop online, and they only buy necessities. Yet statistics show that this overlooked segment of our society has money to spend. Ecommerce vendors that can reach out to older Americans can be richly rewarded.
Conventional wisdom suggests that when seeking customers, ecommerce merchants should pursue teens and people in their twenties. These are the people who own the most electronic devices, are the most comfortable with technology, and do the most online buying. However, you may be overlooking a large and neglected segment of the U.S. population that is eager to spend money online — people over 50.
Advertisers ignore them, concentrating mainly on the 18 to 34 age group. Nielsen, the research firm, estimates that only about 5 percent of advertising dollars are directed at seniors. Merchants too tend to offer products that appeal only to younger shoppers. Marketing efforts are directed mainly at this group.
Why Target People Over 50?
Quite simply there are a lot of them and they have money. Nevertheless, brands focus on the under 50 age group. Yet the almost 78 million Baby Boomers in the U.S. — those born between 1946 and 1964 — are fairly affluent, well educated, comfortable with technology, and willing to try new products. They were raised in a spending-driven economy, unlike their parents who grew up during the Depression.
Indeed, according to Nielsen, Boomers’ online habits are similar to those of the 18 to 34 age cohort. Boomers represent 38.5 percent of all consumer packaged goods expenditures. Research firm Ipsos, in cooperation with Google, conducted interviews with 5,100 Boomers and seniors in April 2013 and found that while the most common reason to use the Internet was to find out about the news and weather, 57 percent shopped online in the prior month and 45 percent looked for coupons or daily deals.
As a society, we tend to stereotype seniors. The only advertising directed at them emphasizes physical infirmity. But older people do buy things other than pharmaceuticals, adult diapers, and scooters. Even those who are retired have disposable income. According to the U.S. Census Bureau and Bankrate, a financial services company, Americans over 50 account for 77 percent of all financial assets, and 54 percent of total consumer demand. They comprise 47 percent of all car sales and 80 percent of luxury travel purchases. They also buy toys, games and electronics for their grandchildren.
According to the 2010 Census, there are 51.6 million Americans aged 60 to 84 comprising 16.6 percent of the population and 41.9 million between 50 and 59 years of age. Statistics from the U.S. Bureau of Labor Statistics show that approximately 18.5 percent of Americans age 65 and over were working in 2012. This percentage will likely increase in future because of erosion in traditional pension plans, a decrease in the value of financial assets, and the uncertainty of 401K plans. Working people need clothing, cars, and electronics.
The results of the 2012 Pew Internet & American Life Project Survey showed that over half of those 65 and older are online and 70 percent use the Internet on a daily basis. However, persons over 75 do not use the Internet very much. But the age group right behind them is comfortable with the Internet and when they reach 75 they will likely continue to use the Internet for email, research, and shopping.
Thirty-four percent of those over 65 visit social networking sites, while 86 percent use email.
What do Older Shoppers Look For Online
U.K. research firm Shoppercentric advises that seniors look for quality and value over bargains when shopping. However, they do tend to use coupons and discounts.
In most cases, it’s not necessary to change your website or your product offerings to attract seniors. It is simply a matter of letting them know that you are interested in their business. Many online businesses find that partnering with organizations such as AARP and offering a discount is a good first step in attracting older customers.
Seniors have the inclination and time to perform extensive research before making a purchase decision. Be sure to provide detailed information about your products and services. Visuals are helpful too. Seniors like to do online research on hobbies, vacation destinations, auto, and appliance purchases. They also rely on the Internet for health information.
Seniors are receptive to email marketing. They are more likely to respond to that than other online forms of communication.
Is Millennial Purchasing Power Overestimated?
Merchants who target people in their teens and 20s may be overestimating the purchasing power of this segment of the population. A substantial number of them are living with their parents, are underemployed or unemployed and don’t have a great deal of discretionary income. In 2012, 36 percent of the country’s young adults ages 18 to 31— the Millennial generation — were living in their parents’ home, according to a Pew Research Center analysis of U.S. Census Bureau data. Of those still living with parents, only 29 percent were employed. Millennials may actually have considerably less purchasing power than Baby Boomers and seniors.
Posted in e-commerce & m-commerce, Electronic Payments, Financial Services, Internet Payment Gateway Tagged with: bargains, ecommerce, electronic devices, email, financial services, Merchant's, online businesses, online buying, shop online, shopped online, spend money online
December 9th, 2013 by Elma Jane
Credit Cards accepted on the American Express network will be offered by U.S. Bank. in the fall of 2014.
U.S. Bank becomes another major bank to form a partnership with American Express. As previously reported in August, Wells Fargo began issuing new credit cards accepted on the American Express network on a limited basis this year, with a full scale launch planned for the first half of 2014.
Pam Joseph, Vice Chairman of U.S. Bank, said in a statement, We believe that the American Express network provides a combination of benefits and services that many of our customers want.
The cards will be available to bank customers in the 3,088 branches of U.S. Bank, as well as online and by phone. U.S. Bank customers will also have a choice of obtaining a Visa or MasterCard.
Posted in Credit card Processing, Electronic Payments, Financial Services, Visa MasterCard American Express Tagged with: accepted, American Express, credit cards, MasterCard, network, online, U.S. Bank, visa, Wells Fargo
