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B2B Vault Episode 38: The Future of Payment Processing, FinTech & Business

Written by Allen Kopelman

January 3, 2022

merchant statement analysis

Video Transcription

Hey, I hope everybody had a great new year’s Eve. Happy new year, everybody. Welcome to 2022. Welcome to B2B fall. Listen, Justin say, well guys, podcast, my podcast, and web assistant. Rocky. Rocky, are you over here? Rocky? What are you doing? Rocky? You got to say hello to everybody. No, no. Oh, there’s Rocky. He’s always here in the studio with us. Welcome to 2022; it’s over here, chilling out. So we decided to put this together today, 2022 look into the future of payment processing.

The last couple of years we’ve been dealing with COVID-19 just set into motion, all sorts of scrambling by businesses and the world of business change. We’ve dealt with supply chain issues, staffing issues. People tried to use new payment methods, do more zoom meetings business, adding all kinds of self-service options. E-commerce is changing the way they do business. All kinds of things are going on. So I wanted to look back, and then a peek into the future. So I’ll look back. What did we experience? What was the hit? Where will we see more growth in the coming years? You know, one thing that shocked everybody was the QR code. We messed around with the QR code probably about ten years ago, and a way for people to scan the QR code and then download an app. And that thing just fizzled out, didn’t do anything but 2021, the QR code with king QR code came back. One thing that helped us immensely was that apple and Google phone makers, you know, made it so that the camera could recognize the QR code. Now it’s probably the problem before why it didn’t catch off is he needed a special app too, to a special app to scan a QR code, which was weird. So that’s why it didn’t catch on. Still, not everybody knows what to do when you see a QR code. Businesses in 2022 need to pivot and be flexible. Pay in-store through e-commerce hybrid, pickup in-store, pickup, Curbside pickup, you know, local delivery, shipping options. Merchants need to give consumers what they want from that standpoint. So let’s talk about the supply chain. The supply chain was a massive problem for everybody. You know, prices went up for all kinds of things. One thing for sure is that I learned a long time ago. Gasoline is a big driver of the economy. When gas prices go up, everything goes up because it costs more to get from point a to point B. So prices will go up, you know, so, and the supply chain thing was that we need more manufacturing in the United States.

One thing we need to manufacture in the United States is chips. I know for a fact that two or three chip factories are getting put together in the US right now. And it’s crucial because the chip shortage crazily affected the payment processing business. You can’t get credit card machines. We could have some credit card machine companies had shortages. One of them right now is no inventory. It doesn’t know when they will inventory one particular machine. I’m not going to name the name of that, but there’s a shortage of, of machines and pin pads, and they’re hard to get. And now, finally, a couple of companies are going to that, that got the parts. So at least they can start fixing some of the stuff that we have sitting around in the office, and it’s broken so that we have more stock. So, you know, the chip shortage also affected the auto industry. Some automakers were unable to get chips, and therefore, because they couldn’t get chips, they didn’t have a lot of cars. And we saw the price of cars, new cars, and used cars skyrocket. Some of that probably was also caused by people moving out of like cities, where they didn’t need a car to somewhere where they needed a car. The next one I want to talk about is CBD and hemp, you know, CBD and hemp. It’s for sale everywhere, gas stations, smoke shops, liquor stores, bars, grocery stores, it’s all over the place, and convenience stores and drug stores it’s everywhere. The processors and banks are hard on this market. I think it was, you know, a challenging market to control. But now we see some new players for 2022 coming into the market. I’m sure that there will be some restrictions on what they’re going to will out, but this is good for merchants. Good news for merchants because the market’s going to become more competitive for them to get payment processing for their business that sells CBD, you know, especially brick and mortar. Right now, there’s only probably one real one or two choices where you can get a merchant account for that. So I think that’s going to be a good thing. And the coming year, 2022, we’re working with three different banks offering CBD that are starting to offer CBD processing in the coming year. The other big question for 2022, the safe banking act. Will the safe banking act pass in 2022? Will the house and the Senate finally get this thing out of the committees? They’ve voted on this thing and several committees, okay. You can’t even count all the committees on two hands. Probably it’s been voted on for years going back. I don’t even know how many years, but so many states marijuana is legal, medical marijuana, recreational marijuana. So it’s a bad time. The safe banking act passes. I mean, if you want this thing to pass, it’s time to write your Congresspeople, you know, and get them to pass the safe banking act. Does it make sense? Cannabis is a multi-billion dollar industry, and the federal government could be collecting a ton of tax. We have a huge deficit. And so there is no reason my mind just, I cannot wrap my brain around it. If I’m in charge of the, if I were the one in charge, I would say, no, we need to pass that because we have a deficit of tax. We have a deficit in this country, and we need to tax this bill multi-billion dollar industry and get our piece of the pie. So let’s go, Congress, consumerization of payments. Let’s skip over something consumer. I think you snuck in the infrastructure bill. Okay.

Infrastructure bill. So the infrastructure bill, it’s not, it’s not my list, whatever. Maybe I made a booboo, but it’s there. The infrastructure bill contains many, many laws. And this thing is something we all got to watch out for contain. The thing about that. Increasing the IRS employees, the banks’ taxes on cryptocurrency track 600 or $800 transactions. So this infrastructure bill, there were two of them. One passed. The other one is sitting on the shelf. I do not think that Congress is going to pass that bill. I think that that thing will sit around, and they’re going to complain about it and discuss it. And then we’re going to have midterm elections coming in 2022. I think I’ll let everybody I say vote go out and vote in 2022 because something needs to get done. Consumerization of payments. I think that you know, businesses I had gone into a business the other day and they had like a sign up at the front, oh, Venmo us money, cash app, bus money, zealous money chime. I don’t even know Jain med is to get John NEPs up money. They didn’t even want to take a credit card, but some apps are only PDP. Some now have a B2B component, but they charge way more than credit card processing. So I don’t know why businesses want to use those. And if you’re a business and you’re like trying to cheat the system, not to take credit cards to pay the fees. Now, these companies are cracking down, and they’re charging fees. We saw today, a cash app is charging. What two points, 2.7, 5%. That’s way more than credit card processing. Okay. Way more. Okay. So Zelle will charge businesses a fee, and so will Venmo. Riding the free train on those is about to end. Maybe that’s also an accounting and reconciliation nightmare for businesses at some point. because you’re getting deposits from all over the place. Or maybe even some of your business deposits are going into personal bank accounts. And then you have to move the money over to your business, or maybe you’re not. And you know, that’s another issue because he’s, these transactions are going to be tracked by the IRS. You’re going to have to answer where did you get the money? Maybe a smart tech company will figure out how to integrate some of these alternative payment methods into a gateway or onto a point of sale. People could pay with these alternative methods, or credit card companies will get smart. Hey, we need to figure out a way for people to send a text message. Send a text message to text payment for a service through your credit card to make a payment. Some something’s going to happen with that.

You can be sure of that alternative payments. You know, ACH is an alternative payment cryptocurrency and alternative payment. You know, all these little apps are; also, I consider alternative payments. I think that those, the little apps that we just talked about, I think that they’re a fad. People use them to avoid paying credit card processing fees during the pandemic. And they skirted around some businesses skirted around the rules by using those. And now the Kubosh is coming down because those companies are now going to start charging people, and it’s, you know, as expensive or more expensive than credit card processing. And, you know, as I said, it’s a bookkeeping nightmare, but from an alternative payment thing that I think businesses should be looking at ACH, forget the check is in the mail. People should look at how they’re doing invoicing and put links in there to get paid to develop payment portals, which is very easy to do. It’s not even a complicated thing. We can show you like you sign up with us, we create a link, and boom, you have a payment portal. This is not a complicated process. You just have your web guy plug it on your website. I mean, it’s very, very easy, people. Companies need to develop more efficient ways to collect their invoices from companies, and using these alternative payments like cryptocurrency or ACH can help lower your costs. Cryptocurrency/virtual currency. The IRS decided to rename cryptocurrency virtual currency. So I think that you know, that’s something that everybody needs to look at. It’s going to be on your tax return. It’s on the 10 40, you know, so we’re all getting ready to file our taxes this year. It’s on the 10 40. And I think for crypto, you know, we have a product where you turn crypto to cash, and we think that that’s going to be a big growth product for us in 2022, we have all programs or all kinds of different businesses. Check out our page. We’ll post links in the article. Some links are probably in the article to where you could find information on each of these subjects and our website. So cryptocurrency, I think, will be a big growth for large transactions, luxury items, real estate, international transactions, the jewelry business. We’ve signed up a lot of jewelry stores and jewelry wholesalers, and they’re already very active with cryptocurrency. Buy Now pay later; this is on everybody’s radar, tons of companies in the market. I think more and more businesses are going to start to offer. Buy Now pay later, pay fax; I think it will blow up in 2022, 2023. We’re getting ready to roll out our hybrid pay FAC and a box program. We can take an ISV or a software company and have you boarding customers within 30 days.

This is a great program we can help with. We act as your consultant. We help you get with the right software company. We are working with a couple of different payback companies and banks. So we get you paired up with the right software for the pay FAC, which creates the instant boarding tool so that you can instantly get your customers boarded and approved to process transactions the same way square, Stripe, and PayPal do it. So I think this type of program will grow significantly in the next couple of years. And this is a no liability program and creates residual income. This is a significant opportunity if you’re an ISV, a software company, or somebody who wants to get into the paint payments with whatever your kind of business. You have to enable people who are using your software to process payments. You can get in on the revenue opportunity. It’s a great way to earn residual income for your business. Chargebacks friendly fraud is growing online and in person. And I’ve said this many times, I’m not a fan of the credit card issuers that see an EMV transaction, and then we’ll issue a chargeback. I’m not a fan of that. And you know, that goes back to the EMV fallback rule that went into effect in October 2015, which should have ended all these cards and presented fraud and chargebacks. And it dropped off for a long time. Then it started to go up. Then it went down again, but now, you know, these card issuers, they, they probably had a lot of customers complaining to them. Why can’t I do a chargeback? And you know, now they kind of change, change up the rules so that you have to be, you have to read your chargeback letters and every little complaint that person puts on the letter and believe me, I’ve seen these letters that 7, 8, 9 different things in there. You need to answer every one of those, or you’re going to lose e-commerce merchants need to focus on fraud in 2022. If you’re not using 3d secure, you need to get 3d secure. Some of these 3d secure companies need to catch up with their technology with WordPress plugins because WordPress is the majority of the internet out there for e-commerce and, you know, custom websites. But I think we’re going to need to see that in 2022. And we’ve talked to a couple of the 3d secure companies, and they are working on more plugins to service everybody, B2B payments. I think this is going to be, again, a big growing thing. We saw it grow and see it year after year for the last five years; every year, more and more companies in the B2B B2B sector are tech. If they didn’t take credit cards, they are now taking credit cards, taking ACH, or doing both. Businesses looking to understand how they can adapt with surcharging and cash discounting combined with ACH to lower everything, lower their fees. You know, getting a payment portal is very important for your business.

If you’re invoicing people, you need to get a payment portal. So you can accept payments 24/7. Businesses want to make their payments the same way as consumers. This is what I call the consumerization of payments. Okay. The next thing we’re going to get into gas stations goes EMV. Okay. Gas stations are about to have the rudest awakening because in October 2015, when they rolled out the EMV fallback rule and said, oh, if you did not process EMV, you swipe the card. Somebody did a chargeback; boom, you’re out the money. Guess what? Gas stations, you’re next to the whole thing for the gas stations, they got delayed, delayed, delayed, delayed, delayed that COVID delayed it again, but now it’s coming up April. This year goes into effect. We have been doing research. We talked to a few companies that have equipment. So we’re aware of two or three companies that all have equipment that can be retrofitted onto your gas pumps. And so that’s good. And a couple of them also offer in-house financing. So if you don’t have EMV at your gas station on your pumps, I know as a lot of the new gas stations, they all have it, but there’s a lot of, you know, independently owned gas stations, and they haven’t upgraded their pumps, and you don’t have to upgrade your whole pump. It’s just where the card is being processed. So now they’ve developed this retrofitting equipment, so it’s very affordable. Plus, you can finance it, and you can get that done. If you need a consultant to help you with that, we can help you have this information up on the website shortly. We’ll post the link to credit card machines versus point of sale. So this has been for the last few years, 5, 6, 7 years, you know, a lot of people switching from just a credit card machine and a cash register to a full-blown point of sale system. Now we have all these like Android terminals that are like credit card machines, but also you can do different things with them. You have a small inventory in there, so it’s good for food, drug, or some small business. It could also be used as a cash register because you could ring up cash sales there. You can do a lot more with these Android Android credit card machines. Cause it’s like, we forget it’s crazy. It’s like a little computer. So, you know, there’s like a lot of simple type programs. Like a simple swipe can be run on them, all kinds of cool stuff you can do on a credit card machine. But many companies want to, you know, get a different point of sale. You know, there’s an Android point of sale. There’s a lot of point-of-sale systems.

You can either buy or lease or get for a monthly fee. It all depends on what you want. And you know, every business has their own unique needs for point of sale. A convenience store has one need, a restaurant has a different need. A smoke shop needs that a liquor store doesn’t need. So we’ve partnered with several different point of sale systems. They’re all up on our website. We even have a couple of new ones that we’re working with now. So we have a solution perfect solution for liquor stores and smoke shops. That’s awesome. So take a look at that because it’s a big thing. And also, you know, the other thing that’s getting big with credit card machines is, you know, hooking them up to wifi. You don’t need to run wires out anymore. All the new credit card machines have wifi, or you can get them where they’re portable. You can go around the store with it, take it out to the curb to get paid, make sure your wifi reaches, or put a 4g card in the machine. So these credit card machines have gotten flexible cash discounting and surcharge. We saw this go crazy during COVID tons and tons of our customers. They knew that we offered it, and they said, oh, we want to switch to that. We needed to save money. You know, we’re losing money. We need to save money. They switched to cash discounting, and surcharges either can pay zero or you could charge less. And then just basically you’re, you know, supplementing what you’re doing with your payments. So you can be supplementing, you know, supplementing, let’s say you only want to charge one and a half or 2% to your customers, and then you’ll pay the rest of the fees. So many companies are getting into this more and more companies are switching over to this, you know, and then the B2B, you can pair it up with ACH, and you know, it’s a win-win situation for the business. COVID pushed that hard, but I think it will continue to grow e-commerce and what I call hybrid e-commerce. E-commerce will continue to grow. Merchants who don’t have a website, you’ve got to get a website. Find some way to get all or part of your business up on the internet. And especially for retail stores, you know, either that, or you just got to come up with diff more flexible ways to sell to people. So, you know, I saw a retail store recently, you know that everything on the website, oh, you can buy this stuff, then do an in-store pickup, you know, a curbside pickup that local a local delivery option, or they would ship it to you. And I think this is the future for businesses. I think retail businesses and restaurants need to get very flexible with how people can, can, and can consume. You can’t count on that. All these people will come to eat in your restaurant, like a nap. Like we just had like this whole Alma Cron spike. And then, all of a sudden, nobody wants to go out to eat. All the restaurants are empty places. They used to have a line. There’s no line. Some places are busy, and some places are not busy. So, you know, you got to get businesses, need to get flexible with how there’s otherwise, everybody’s just going to shop at target Walmart, Costco, and Publix, because they ha they’re all doing it.

You know, I don’t think some of the Costcos have curbside pickup, but they all deliver, you know, everybody’s doing this. So you got to get with the program and pivot your business and see, Hey, what new service can I offer? If that’s going to bring in more business or payment options, what payment option, if you have a big-ticket business, Hey, do, or, you know, oh, do I need to start offering cryptocurrency and my jewelry store? And you know, we put it in like three jewelry stores. They’re blowing up with getting people to pay with crypto. So pivoting and flexibility are the key for 2022, you know, cash discounting and surcharging; I don’t think it’s going to go away. Gas stations have been doing it for years. The government’s been doing it for years, which will grow an e-commerce hybrid. E-commerce is all growth, gross, gross growth. ATMs in 2022, someone told me cash is dead. Oh, we’re going to become a cashless society. This is a, and I started laughing. You know, ATMs are dispensing cash left and right. You don’t see banks closed taking that co-taking their ATMs and closing them down. So banks, that’s not going to happen. ATMs are here to stay at ATMs. It can also be very flexible. So what else can you do on an ATM besides taking out money and people love money; they love cash, but what else can you do? So here’s a quick breakdown of additional benefits that can be going on in an ATF currency conversion. When you have travelers from out of the country, it’s not a lot of that going on right now, but it was going on before, and that was a major selling point. When we put an ATM in a hotel, someone’s coming from Europe, and they want to do the currency conversion on the ATM. So they’re going to have to pay all the fees. They get sticker shock from the currency conversion fee when they’re at home. They can do it right on the ATM saves that money conveniently. You can buy a gift card at ATMs. You can sometimes donate to a charity using an ATM. You can buy cryptocurrency at an ATM or a little machine next to the ATM. That’s linked to the ATI MasterCard money pickup.

This is a thing that MasterCard has. And some banks app where you can go online say, oh, I want to get $300 from an ATM. And they just give you a code. You go up to the ATM, and you punch in; instead of punching it, it says, put in your card, you do a cardless transaction, or you hit the MasterCard money pickup. If a cardless transaction button that you choose MasterCard money pickup. Let’s say you need to send your kid 300 bucks at college. Boom. They go to the ATM. If it’s equipped with MasterCard money to pick up and pick up cash without having ATM guards, pretty cool stuff. You can buy it, and you can send money to someone and pick it up. That’s what MasterCard money pickup or a cashless transaction like Wells Fargo offers cashless ATM transactions. And the more banks are offering that all the time. You just have to cashless a cashless ATM transaction. It prompts you to put in your code, and then it automatically spits out whatever you asked for on the app. And here’s a cool ATM FACT: besides that, ATMs are cool, and they do more than dispense money. You can also have ATMs that are cash recyclers, where people can make deposits, and then you can dispense the money they deposited. But that’s another cool thing, ATM fun fact. Currently, over 470,000 ATMs in the US banks own almost about 191,000. And 278,000 over 270 and thousand are independent. So they’re owned by independent operators or the business where they’re located. So, you know, there are 500,000. ATMs are in the US, and that’s not stopping. So, you know, another thing I wanted to talk about, throw it out. Over the last two years, these internet banks have been growing, and some banks sponsor these banks. And they allow people to open up a bank account. They don’t even have to visit the bank. Many banks let people open bank accounts over the internet, and you have to upload documents and driver’s licenses and take a selfie and all this crazy stuff. We’ve seen some fraud on the merchant accounts. We get from people who send us that they’re banking these internet banks. So we’re very wary of them. So, but you know, having a bank account there and some of them, you know, serving the unbanked or underbanked population. So there’s lots of stuff going on for 2022. That’s me, I don’t like to use the word predictions, but I see, you know, what’s the future. So the hot things that we’re going to see happening over at nationwide payment systems at 2022 the supply chain will get a little better. The CBD CBD businesses will have a hemp business that is going to have more options. We’re going to be watching what Congress does going to watch. What’s going on with the safe banking act. We will talk more about the consumerization of payments on the B2B vault. I’m going to talk about alternative payments.

We look for growth of cryptocurrency growth with consumer financing and buy. Now pay later, look for the pay facts opportunity to we’re, we’re looking for that. That will be a big growth in the next one to three years, hopefully, chargebacks. Maybe somebody’s going to Sue these, get together some kind of retail Federation or restaurant Federation is going to go, maybe file a lawsuit against the card issuers with these cards, present EMV transactions. So enough is enough B2B payments. We’re going to see growth with that. Gas stations will have to go EMV more growth with cash discounting and surcharge. We’re going to see more hybrid, what I call the hybrid to e-commerce. And that also can be causing many businesses to rethink where they’re located to be somewhere where they can do curbside pickup and things like that. And I’m sure more people will order ATMs in 2022 and put all kinds of different services on those ATMs. So customers can use ATMs in their business. And that’s the look into the future from B2B vault brought to you by nationwide payment systems and PS bank.com. Everybody. We look forward to a prosperous 2022. Everybody has a happy, healthy year this year and 2022. Hopefully, all this COVID maybe can calm down and disappear, and we can get back, get back to having like a good time and be able to go out and party, not worry about what we’re doing, but everybody has a great year. And if we can help you reach out to us, if there’s something you want us to talk about on the podcast, you know, let us know, hit us up on social media, Twitter, Facebook, leave us a message, a comment, and we’ll answer you back. Or maybe we’ll cover it in the podcast and mention you. And also, don’t forget to enter the contest that ends at the end of January. You can win an apple watch. So everybody has a great day Carpe Diem from B2B Vault – The Payment Technology Podcast.

Merchant Statement Analysis | Merchant Services Statement Analysis
Merchant Statement Analysis | Merchant Services Statement Analysis

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