Payments

4 payment myths you need to forget

By Margrethe Lunde
On 27 April 2017

Wherever you turn in the business world, you will encounter different myths that are often hard to see through. 

Very often we perceive information as true – without actually having sufficient grounds to do so.

It could be something we heard from a friend or colleague, something we read in a comment section online, or we might simply have reasoned our way there. Regardless of the source, these misperceptions are gasoline to all myth breeding, and it enables myths to live on and grow stronger.

Well, I say "no more"! 

(At least for these common myths related to card payments. Got to start somewhere right?)

I hope you are ready to dive in and debunk these myths; not only to gain new knowledge, but also to find out how you can use it to make the right decisions for your business and your customers – and stay ahead of your competitors. 

Sound alluring? If so, I recommend reading further.

1. As a business owner, I don’t need to worry about PCI

If you are running a business, you’ve probably heard about PCI before. If that’s not the case, you’re in luck; I’ll talk you through it.

When talking about PCI (Payment Card Industry), people are generally referring to the so-called Payment Card Industry Data Security Standard – mostly referred to as the PCI DSS.

The PCI DSS is a security standard for the purpose of securing card data globally. The standard includes a number of requirements that all businesses handling payment card details must meet. It is owned and maintained by the PCI SSC (Payment Card Industry Security Standard Council), and was created through a collaboration between the card issuers Visa, Mastercard, American Express, Discover and JCB.

Some of the most common misunderstandings related to PCI is that it’s not applicable to everyone and that online businesses (or even just small businesses) might be excluded.

Well, let me put it this way: PCI applies to anyone who in any way stores, processes or transmits card data – regardless of the size of the business.

No exceptions.

So how do I get PCI compliant?
Being PCI compliant, or meeting the PCI standard, means providing protection and encryption of card data – and basically keeping your customers safe. So simple, yet so complicated.

PCI DSS is composed of 12 security requirements that you have to comply with. Mastercard has an overview of these requirements and relevant sub-requirements which you can find here.

There are numerous different levels of PCI DSS, based on the business’ annual transaction amount. The higher the number of transactions, the stricter the requirements for documentation.

In order to secure that the requirements for PCI DSS are maintained, companies can carry out a so called "self assessment". However, you can also choose to hire an external business with a PCI-qualified auditor to perform quarterly or annual PCI-validations of the company.

PCI might not be the most thrilling part of your business journey. However, it is very important for both your own and your customers security. 

Can’t get enough of PCI? Check out PCI Security Standards for more information and how-to-guides. You are of course more than welcome to direct your questions at us as well.

2. Buying is better than renting

It is often said that renting something is basically ”money down the drain” while buying it is an investment. This might have something to do with our ancient instinct to own things (and, I have to say, I don’t think this has always been the best guiding principle for the human race).

And while it might be true for some objects such as real estate, this logic is highly dependent on the item or service in question.

When it comes to payment terminals, there are in fact several advantages to renting one instead of buying it.

Why, you ask?

It’s pretty simple actually. When buying a terminal, you are not even halfway done. You still need a lot of additional stuff, such as a license, broadband agreement, SIM-card, etc.

Then come the questions: Who will help you? What if the terminal is broken or acting weird? What if you can’t understand the setup? Sorry to say, but you’re pretty much left on your own there.

Another important aspect is that for most companies – especially in a start-up phase – their needs will change over time. Perhaps you’ll realize that you’d rather have a wireless terminal than a stationary one. Or maybe a new feature is launched – like NFC – that you’d like to offer.

From a legal perspective, the laws also change from time to time, causing all terminals that don’t meet certain requirements to be outdated and in need of replacement. And that, my friend, will be your responsibility.

If you buy a used terminal, you run an even higher risk.

Despite the fact that you might have saved some money (compared to buying a new one), you might end up paying more in the end since you have no warranty whatsoever.

I’ve heard a lot of stories from business owners who burned their fingers on buying used terminals. They might have found a good deal just 5-6 months ago, but now have to buy new terminals due to mandatory changes in security requirements.

When renting a terminal, you won’t have this issue, as you will always be provided a terminal that meets the PCI DSS standard and other legal requirements. All required updates happen automatically, and when new features are launched, you can easily upgrade the software in your terminal, or change to a new terminal by the end of your subscription period without any extra costs.

In rental agreements, you often don’t have to commit to one particular terminal, and you can easily change between a wireless and a stationary or upgrade to a newer model by entering a new agreement with your supplier. Customer service is normally included when you rent – so if you experience any troubles with your terminal, or it breaks, you will get help or a new terminal sent to you right away.

You should also be aware that some suppliers – Bambora included – include all necessary equipment (license, SIM-card, receipt rolls, etc.) in the rental price, while others don’t.

But rental is more expensive in the end, right?
Actually, it’s quite the opposite.

As a result of increased competition and pressure in the market, terminal rental prices have dropped significantly. Furthermore, the total price of renting a standard terminal over a certain period of time is now actually lower than the price of buying a new terminal over the same period. Based on our own rental prices over a period of 24 or 36 months, we see a clear advantage to renting rather than buying a terminal.

However, you should keep in mind that rental prices can vary a great deal from one supplier to the next (despite the fact that the terminals are usually the same). I strongly recommend you to compare prices and included features and services before making a final decision.

From an investment point of view, you should also consider rental to be the better alternative. By not having to pay a lot of money up front and hoping for a return on your investment, you can use your money on something you really need instead.

The same goes for the so-called start-up or set-up fee, which is a common practice among many payment solution suppliers. However, we’re not the only company that’s realized the value of not having this fee. By offering a free start-up, there are no high initial costs – and you can place your money where they are needed (which is probably everywhere in your business, right?).

3. Mobile payments are mainly used for online stores and apps

Despite mobile payments being used mainly in apps and online today, there's no reason to believe that brick and mortars will escape this increasing trend.

Perhaps you’ve already tried paying with your phone in a card terminal. The most common way to do so is through so-called ”mobile wallets” that connect your payment card to your mobile phone. 

Today, this solution has yet to shine as bright as its online counterpart – but give it time. Technology is changing fast, and with new features such as NFC (Near Field Communication), mobile payments in POS-locations will soon receive the same (if not greater) appraisals as payment cards did in their time.

Furthermore, an increasing number of brick and mortar stores are now accepting universal mobile payment alternatives, such as Apple Pay, Android Pay and Samsung Pay. These will undoubtedly experience a rapid growth in the time to come.

Consequently, my advice for you is to facilitate mobile payments in your store – perhaps by making sure your terminal is up to date and includes the right equipment. That way, you’ll be prepared for the future of mobile shopping.

4. Payment solutions are time-consuming and cumbersome

Now you might think: "Hey, this is not a myth?!" In that case, I’d say you’ve been unfortunate. Either due to your choice of supplier or the caprices of fate. Payment solutions don’t have to be time-consuming or cumbersome – that’s entirely up to the supplier.

In fact, crushing this myth was one of the main reasons Bambora was born. We wanted to make payments a simpler affair for business owners. When ordering a terminal from us, we ship it to you the very next day – all the while helping you apply for an acquiring agreement with Visa and Mastercard. When you receive the terminal, you just plug it in – and you’re good to go. All within a few business days.

No kidding.

So if someone tells you that it takes 3-4 weeks to start accepting payments or that something "will be fixed within 2 months", please know that this is not a universal timeframe for payment solutions.

That way you can get started with your sales even faster – and time is money, right?

Hopefully, you’ve learned something new in this post. Maybe you’re sitting there right now enjoying the glorious feeling of new knowledge and fresh impetus rushing through your body. Or, you’ve heard it all before – and never been fooled. In the latter case - good for you! You apparently have a keen eye for the truth and a good knowledge of the payment business.

Can you think of a myth that hasn’t been mentioned here, or do you have any comments to the myths above? Reach out to us on FacebookTwitter or send us an email – and we’ll be super happy! 

Margrethe Lunde

Energetic word nerd with a writing speed of 100 WPM and a passion for adventure, good stories, and simplifying the overly complicated. When she's not absorbed in a book or a blog post, she's on "fjellet" (in the fells) or somewhere near freshly brewed coffee.

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