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Steve Thomas Commentary Highlights Looming Impact of Apple Pay, ‘Smart’ Credit Cards for Businesses, Payment Card Industry, Consumers

The latest published commentary by McGuire, Craddock & Strother’s Steve Thomas’ underscores how rapidly evolving technology is changing the finance landscape for businesses from mom-and-pop merchants to the multibillion-dollar payment card industry.

Thomas, who serves on McGuire, Craddock & Strother’s technology committee, writes: Cold, hard cash and magnetic strip credit/debit cards took on a more antiquated look in November as Apple Pay instantly out-performed all other mobile wallet services and positioned itself as the Pied Piper of wireless point-of-sale payments. Meanwhile, in less than a year, credit/debit cards will be “dipped” or “tapped” instead of “swiped” because they will have built-in computer chips and wireless antennas. The immediate future of in-store payments appears to be in electromagnetic waves. 

Click here to read the full commentary.

At stake is dominance in the payment card sector, significant investment requirements for merchants, and a shift in fraud liability from the payment card industry to merchants. Thomas notes that U.S. merchants face a rapidly approaching October 2015 deadline to acquire costly new point-of-sale equipment in order to process the new chip-based credit/debit cards. Visa has warned that businesses that have not acquired the new equipment could be held responsible for fraud losses.

Writes Thomas: The United States is the last major market to still use the old-fashioned swipe-and-sign system, which some claim is why almost half the world’s credit card fraud now happens in America, despite the country being home to only about a quarter of all credit card transactions…The nostalgic comfort of paper bills and jingling coins likely won’t pass soon, but contact chips and invisible waves are the wave of the future of physical payment.