2022 Review

December 20, 2022

2022 Review

2022 is coming to an end, and now is the perfect time to take a look back at what has happened within the payments industry this year.

Interchange Price Changes

The interchange ++ pricing model is designed to be more transparent than a blended model, with the Merchant paying the interchange fee separately to the Merchant Services Charge (MSC).

Following the UK’s exit from the European Union, UK payments are no longer covered by the EU’s Interchange Fee laws. This means that Card Schemes were able to increase their interchange fees within the UK.

Visa and Mastercard announced that it increased its fees to 1.15% for consumer debit cards and 1.50% for consumer credit cards.

Sunset of 3-D Secure v1

3-D Secure version 1 was decommissioned on the 18th of October 2022. It was replaced by EMV® 3-D Secure.

EMV 3-D Secure was first released in 2019, and with it saw a vast improvement in user experience.

  • Frictionless Transactions – Performing an authentication step in the access control server (ACS), a card issuer can approve a transaction without the need for the cardholder’s authorisation. This frictionless authentication allows transactions to occur quicker and smoother.
  • Mobile Integration – With smartphones and tablets becoming an integral part of our lives, an integrated EMV 3-D Secure process for mobile payment processing is essential. Merchants can integrate an EMV 3-D Secure process into their apps, making the customers’ checkout experience fast and efficient.
  • Non-Payment Authentication – You can use EMV 3-D Secure for more than E-Commerce transactions. The introduction of “non-payment authentication” can authenticate a cardholder without them having to make a purchase. With successful authentication, their card details can be added to an e-wallet without the need for another authentication request at checkout.

Cost of Living Crisis

With the cost of living crisis, the Payments Industry saw people move away from purchasing leisure and non-essential products. As well as this, there was an increase in Buy Now, Pay Later (BNPL) transactions.

More Merchants than ever are beginning to offer Buy Now Pay Later as a payment method. Schemes such as PayPal Credit provide security for the business, whilst also offering flexibility to the consumer. The scheme allows consumers to spread out their payments over a number of months, meaning they don’t have to pay back all their debts at once.

However, these types of schemes aren’t always suitable for everyone. If you’re struggling financially, then a Buy Now Pay Later scheme isn’t going to help you. You’ll still end up owing the full amount of the item, with potential interest on top.

The Rise of Crypto

Crypto is an industry that is vast and ever-changing, so to get a first-hand account, Cardstream spoke to Mann Matharu, Founder-CEO of Qi, a company helping businesses to take digital currency payments.

 “There are far more crypto holders than ever before. An estimated 300 million people now hold crypto in blockchain-based digital wallets” Mann states. Although crypto’s overall value has dropped, from a market capitalisation of $3.2 trillion to $890 billion, more businesses than ever are looking to implement crypto transactions.

Mann explained how “85% of US businesses are looking to go live with crypto acceptance functionality.” This opens a new stream of income to which Merchants may not have had access previously.

Open Banking

Open Banking payments have the highest level of security, using Secure Customer Authentication (SCA), reducing fraud risk and saving Merchants time and money. Merchants using Nuapay with Cardstream will benefit from faster access to funds; auto-reconciliation; and reduced costs. In turn, payers will benefit from a seamless user experience; instant access to refund credits; and the ability to leverage biometric authentication for a speedy payment process.

Nuapay is EML Payments’ market-leading Open Banking business. Direct Debit, Credit Transfers and Instant Payment products are also available through one single ‘bank-grade’ platform, easily accessible through industry-leading APIs. Businesses and their customers benefit from the immediacy of Open Banking and account-2-account payments and can save time, money and resources at every turn. This is payments as it should be.

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