The Internet of Things & The World of Payments
The Internet of Things (IoT) is shifting how we all connect with the world around us. As technology continues to break new ground, our interaction with the world has become increasingly interconnected.
This type of IoT paradigm shift is also directly affecting the world of smart payments. Take a look around to see examples such as integrated card swipers on soda machines, mobile-based payment devices for small businesses, quick connections to digital wallets and mobile accounts, and the entire #smartpayment trend as a whole.
We now make it so much easier to provide payment methods across the IoT within the business. Accordingly, business owners should be aware of important considerations such as payment security, regulation changes, compliance, and more.
Read on to get all the details about these new and exciting changes in payment options to ensure that you’re keeping your business safe, secure, and within compliance for your industry.
Regulative Changes & EMV “Chip” Cards
As most businesses have already seen, chip cards have begun to take precedence as the primary type of card transactions. Also known as EMV (Europay, MasterCard and Visa), these cards have greatly heightened overall payment security and diminished the fraud risk that was common for older magnetic stripe cards.
Magnetic stripe data never changes – which is why it can become a much greater fraud risk over time. All it takes is one data breach to access this card information and use it for various fraudulent activities.
EMV technology changes this dynamic by issuing a unique transaction ID for each use. This changes every time the card is used, so the risk for data theft is much lower. Whenever fraud does occur with these cards, typically the bank or payment processor will be liable for the loss.
Business owners need to be aware that they now hold the burden of responsibility for older swipe-based card readers. If any type of fraud or data breach is traced back to their point-of-sale, they will be liable for those costs until they upgrade to newer EMV readers.
Also known as the Payment Card Industry Data Security Standard (PCI DSS), these standards refer to all the security protocols that businesses, banks, and payment processors must follow. Maintaining data security is imperative within the IoT world. Accordingly, this standard helps to give everyone an agreed upon unit of measurement to provide the greatest level of security.
Compliance with the PCI DSS is absolutely pivotal for businesses of all sizes. Fines for non-compliance range from $5,000 to $10,000 a month for acquiring banks not following these regulations. If your business is the culprit of compliance violations, you will likely incur these fines, sever relationships with banks and financial institutions, and incur higher transaction fees and operating costs with your merchant accounts. These costs can be especially devastating to small or medium-sized businesses – making the need for compliance even more important.
Your precise compliance standards will vary based on your business’s size and scope. Current standards separate merchants into four levels, depending on their volume of card transactions completed. To learn more about PCI standards and to verify your own compliance, you can download our guide; 7 Steps To PCI Compliance Tipsheet.
Security for Your Business and Your Customers
As you can see, the importance of maintaining high security standards is even more essential as the IoT continues to integrate smart payments across more sources. By verifying that your security standards are up-to-speed, you’re ensuring the continued operation of your own business. Even better, you’re helping to keep all your customers’ financial information much safer from any type of fraud or theft.