2014 brought a barrage of media reports on data breaches, uncovering the surprising details that left some of the biggest retailers in North America in financial shambles and utter disbelief, while the rest of the retail world held their breath in fear they would be next.
It is no wonder, then, that 2015 begins with new promise of a strong focus on data security, and not just from payment companies, but from the retailers themselves. Recently, Boston Retail Partners sent out their annual POS/Customer Engagement Benchmarking Survey to over 500 leading North American retailers, with 58% of those surveyed with annual sales of $1 billion or more. The results showed more than 63% of retailers have put payment security in their top three priorities for 2015 – proving that retailers understand that the threat of compromised data is real.
“To breach is to die. It is a brand killer and CEOs will lose their jobs,” said Ken Morris, principal at Boston Retail Partners, Boston. “Retailers are taking this risk seriously, as the negative impact of a data breach can be massive in terms of financial costs and, more importantly, the damaging effects on consumer perceptions and loyalty.”
“To breach is to die…..” Harsh, but true words, and the push for retailers to self-prioritize payment security shows that no business wants to find out this truth the hard way.
Additional results of the survey fall in line with the current state of affairs, and reveal the payments trends that are forming. Here are some key points retailers consider important for 2015.
- EMV – According to the report, there will be a 650% increase in EMV implementation this year – largely because a deadline of October 2015 has been set for retailers to upgrade to EMV standards, after which stores will be held responsible for fraudulent charges, rather than banks.
- Point-to-Point Encryption (P2PE) adoption is also rising, with 45% of retailers surveyed expecting to add P2PE capabilities by October 2015. P2PE solutions encrypt cardholder data within the POS entry device so that it is not available as clear-text data.
- Tokenization – About a third of respondents use tokenization, which enables merchants to perform refunds, returns and recurring billing without the card number.
- NFC or Near-field communication – 10% of those surveyed have NFC enabled terminals, but 35% anticipate supporting NFC payments by October.
- Technology – Most retailers still use traditional POS systems but now have the ability to access important information on products, inventory and the like in “real time,” which has in turn made the consumers demand a faster, seamless sales process from their retailers.
- Mobile POS will play a huge role in filling consumer demand.
Whether it is the retailer’s needs that will dictate the payment trends in 2015 or the payment industry educating the retailers on what secure payment solutions are needed – it is certain that a secure, holistic approach to payments is being recognized.
Bluefin Payment Systems shares retailers’ concerns for the security of cardholder data, and offers the most comprehensive suite of P2PE solutions available to retailers today. Make sure to join us on February 9th as Bluefin discusses PCI-validated P2PE for retail POS and mobile payments in our PYMNTS.com webinar.