In less than a year, chip and pin technology will move from retailer’s “nice to have” category to “have to have.” That’s because in October 2015, all credit cards will be equipped with chip and PIN functionality. Goodbye, magnetic stripe, hello improved security. But, it won’t arrive in time for payment processing for the holidays, and that’s unfortunate.

It would be great if retailers were currently in the thick of implementation of the technology, and that the new readers would be in widespread use this holiday season. Unfortunately, this technology — which aims to make in-store transactions virtually impossible to counterfeit — still isn’t in most stores and won’t be commonly available until next year. That’s the case despite the well publicized data breaches at retailers such as Nordstrom’s, Target and Home Depot.

Experts say that credit and debit cards in the United States are about 10 years behind the rest of the world. Chip and PIN cards, also referred to as “smart cards,” are used globally; many in the payments world are shocked that the United States has been so slow to adopt the protocol. The magnetic strip system used in the United States is simple to hack as it requires customers to simply supply a signature to authenticate a purchase. It’s pretty easy for criminals with victims’ credit cards in their possession to begin making purchases. We’ve all heard horror stories of thousands of dollars being charged before the credit card was cancelled.

Other times, thieves can also use information obtained by Internet hacking or skimming — secretly swiping a victim’s card on a card reader — to create clones of unsuspecting customers’ cards. A version of that technique was used last year at Target when 70 million credit card number were stolen.

Chip and PIN thwarts cloning of credit cards. Criminals trying to use lost or stolen cards with chip and PIN must know the PIN in order to be able to use the card in a transaction. Right now, Walmart is the only major retailer that currently accepts chip cards in its stores.

Last week, President Obama signed an executive order requiring that by January 1, 2015, all retail payment card terminals at federal agencies will be able to accept the chip-and-PIN technology, and all federal government-issued cards should also be equipped with the technology. According to the order: “While the U.S. Government’s credit, debit, and other payment card programs already include protections against fraud, the Government must further strengthen the security of consumer data and encourage the adoption of enhanced safeguards nationwide in a manner that protects privacy and confidentiality while maintaining an efficient and innovative financial system.”

Still, it’s been — and will continue to be — a long road for retailers large and small to make the conversion from magnetic stripe. An estimated 5 billion magnetic stripe payment cards are in use worldwide, with 15 million magnetic stripe POS terminals in the United States, according to market research publication The Nilson Report. Credit card and debit card fraud resulted in losses amounting to $11.27 billion during 2012, according to Nilson’s most recent figures.

Retailers incur $580.5 million in debit card fraud losses and spend $6.47 billion annually on credit and debit card fraud prevention annually, Nilson notes. RetailPro understands that saving on those costs would allow retailers to boost their bottom-lines and invest in better technology and increase inventories. We have recently partnered with payment technology innovator Merchant Warehouse to provide secure, value-added payment solutions.  MW’s Genius Engagement Platform, can accept any payment type, and can even evolve to accept yet-to-be-developed forms of payment. As a contactless EMV platform, retailers using the Genius platform qualify for elimination of PCI compliance, in accordance with Visa’s TIP program.

To learn more about the Genius solution for Retail Pro, go to https://www.retailpro.com/Solutions/Genius.php

This entry was posted by Jennifer Bosavage on Wednesday, November 12th, 2014 at 5:41 pm .

Beacon technology can help a retailer understand a shopper’s buying patterns while he or she is in the store — pretty valuable information especially when it comes to understanding why certain items fly off the shelves, and others seem to grow roots. It’s also helpful in learning why some shoppers rarely buy anything at all. But the shopping experience is two way, and if there is anything technology adoption has taught us, it’s that the customer must also perceive a benefit from any implementation.

Ideally, a retailer can, through Beacon technology, offer a shopper targeted discounts and other rewards based on his or her store history. Perfect, right? It could be a win-win for both parties. The trouble, however, is that customers are hesitant to hand over access to their personal information. With recent well publicized retail POS breaches, retailers’ mobile security systems are under close scrutiny.

In “Best Practices: Beacon Location and Security and Encryption,” James Buchheim, CEO of Stick and Find agrees that care should be taken when deploying beacons to ensure their infrastructure cannot be used by unauthorized third parties. He suggests:

• Using a non-deployer unique UUID
• Ensuring Major (which identifies location) and Minor (which identifies location within a location) schema is not decodable by 3rd parties (random)
• Change Major and Minor frequently (example: once per minute)
• Deploy and configure with a secure, private password

Retailers should also consider adding data encryption to their beacon solutions. And, applications that trigger value transactions should use encrypted beacons. Of course, publicizing this to shoppers is critical for customer buy-in. A recent study on Apple’s iBeacon found that while the technology can be quite effective when implemented well, over saturation and irrelevant messages can be “disastrous” for a brand.

For retailers to realize beacon technology’s full potential, customers have to embrace it. Buchheim offered four excellent tips:

1. Always offer customer value in return for knowing their location. Only two years ago, many retailers dismissed the value of discounts, coupons, etc., with their shoppers. They (erroneously) believed that customers would simply adopt technology for its own sake. What happened was shoppers brought their own technology into the store and started comparison shopping online. Today’s savvy retailers know that customer incentives must be part of their approach.
2. Ensure customers fully understand how their location data used/recorded. No surprises. Customers will perceive retailers as “spying” on them if there is not full disclosure.
3. Take steps to protect live or historical data in mobile app or other platform. Market your commitment to security.
4. Do not share user location data with 3rd parties without permission(s). A no-brainer, but always good to reiterate.

Bottomline: It’s always important that an IT solution address a particular problem or challenge. But with beacon technology — in which information is pushed to customers based on their personal shopping habits — that need is even more acute.

This entry was posted by Jennifer Bosavage on Tuesday, November 11th, 2014 at 2:29 pm .

The retail industry has evolved significantly in the past decade, driven by the perpetual release of new, engaging and exciting consumer technologies that have effectively changed commerce forever. Although the release of services, solutions and platforms have appeared to peak, studies and forecasts indicate that retailers will continue to face a complex landscape of customer demands and competitive requirements for years to come with respect to embracing novel technologies. 

Retail customer trends have been closely tied to IT for years now, and those businesses that have been the quickest and swiftest to meet evolving demands tend to enjoy the strongest engagement, retention and attraction of consumers. Keeping one foot in the current and the other in the future is critical to ensure that every opportunity to excel and drive revenues is met with the preparation, agility and timeliness necessary to gain a competitive edge. 

Experts speak
The Guardian recently interviewed several expert marketers regarding the trends shaping the retail sector today, as well as those that are still somewhat rooted in the future. Many of the responses related back to certain technologies that have already become critical components of a successful industry player. Not surprisingly, an emphasis was placed on mobile purchases, ecommerce and continuous consumer engagement. 

According to the news provider, Michelle Whelan, managing partner of an international marketing firm, focused on the increasing ubiquity of breakneck mobile broadband speeds as one indication of where consumer trends are heading. 

"The arrival of universal 4G earlier this year brought with it a more immersive and instant shopping experience than ever before – putting the most exciting features of mobile retail as we know it into high definition," she told The Guardian. "The 4G experience means that far more people will be turning to mobile for shopping, which could mean an extra few million in the coffers of those retailers (such as John Lewis) who have invested in their mobile channel."

More to come
Mobile is just one of the many trends that all retailers need to have on their radar today, and there will be plenty of other disruptive forces entering into the industry before long. By ensuring that the business is functioning optimally and consumer demands are being met in stride, these types of trends will represent opportunity rather than stress to the average retailer. 

This entry was posted by Retail Pro on Tuesday, November 11th, 2014 at 9:49 am .

Mobile devices, including smartphones, tablets, portable computers and wearable gadgets, have transformed the corporate and consumer landscapes forever, especially as adoption of these modern assets has reached close to critical mass in recent years. Although virtually every industry has been positively impacted by enterprise mobility, certain businesses have had a bit more to gain from the shifting tides of digital commerce, notably retailers. 

Some of the most successful retailers have embraced mobile technologies as new methods of driving long-term revenue increases through the targeting of consumers who enjoy making purchases through these devices. Those who have not adopted these strategies and other retail technology solutions should do so soon, as studies indicate the average customer is more interested in a complete shopping experience that includes storefront, website and mobile environments. 

Tangible advantages of mobile
The Pittsburgh Post-Gazette recently reported that roughly 50 percent of all traffic in online retail originated from mobile devices this past August, which represents extensive growth given the 4 percent recorded the same period in 2010. According to the news provider, one study from Accenture revealed that nearly one-quarter of American consumers intend to make purchases this year, or 6 percent higher than in 2013. 

In a word, brick-and-mortar retailers are not necessarily losing ground to online competitors, but rather being forced to expand upon their operations to ensure that digitally driven prospects are not lost to the other guys. The source explained that the National Retail Federation has predicted that holiday sales will be up 4.1 percent this year, but that this forecast will only manifest into reality if the sector fully embraces multi-channel economics. 

Without at least some foundation in the World Wide Web, retailers will simply not enjoy the same types of revenue growth opportunities as those who have omniscient footprints across a wealth of channels and environments. 

How to get started
Retail industry technology has progressed significantly in a relatively short period of time, and decision-makers should ensure that they are keeping pace with the progression of innovation. By first beginning to embrace mobile platforms and applications that can lead to stronger customer relationship management, then moving into more advanced strategies that leverage ecommerce software, retail analytics and other technologies will help the retailer get up to speed on modern industry demands before long. 

This entry was posted by Retail Pro on Monday, November 10th, 2014 at 11:24 am .

The holiday season is fast-approaching, and many analysts are concerned about the economic impact recent data breaches will have on consumer shopping behaviors. Certain studies have indicated that the average household is becoming a bit more concerned about information security and privacy protection, but the frequency and devastation of major events has not truly made them less likely to shop at certain stores. 

Still, the general sentiment remains that businesses must begin to be a bit more serious and aggressive in ironing out their retail POS security strategies, as these systems have continued to be the favorite targets of hackers from around the globe. With the right types of POS software, though, these firms can better protect their finances and consumers – not to mention profit margins given the high costs of breach – more proactively and comprehensively. 

Clashes strain security initiatives
Bank Info Security recently reported that retailers and financial institutions have been, for lack of a better phrase, at one another's throats in the past few months, pointing fingers whenever a breach takes place rather than working together to get the job done. According to the news provider, the National Association of Federal Credit Unions and the Credit Union National Association were called out by the Retail Industry Leaders Association for a lack of accountability in card information security. 

This has been a rising trend that has not benefited virtually anyone involved, as the mentality seems to be focused on placing the blame. In a way, though, the responsibility appears to be falling on the shoulders of retailers, as the source pointed out that one study from the Identity Theft Resource Center found that credit unions are only responsible for about 1.5 percent of the breaches that occurred in the United States this year. 

As such, it is time for retailers to step to the plate. 

What can be done?
There are a wealth of fortifications that should be in place to protect systems and data from exposure and breach. However, in the retail sector, focusing on access and credential management, as well as control of POS systems, should be the highest priorities, as shortfalls in these areas are among the most common causes of breach in the industry. 

By leveraging effective retail POS software and security solutions, businesses might be able to avoid significant damages when the next major 

This entry was posted by Retail Pro on Friday, November 7th, 2014 at 10:17 am .

With the introduction of new technologies such as Apple Pay, and its soon-to-debut competitor CurrentC, mobile payments have picked up significant transaction at the point of sale (POS). A recent study from Gartner predicts that mobile commerce revenue in the United States will account for 50% of all digital commerce sales by 2017.

It has been challenging for retailers to get consumers to embrace mobile payments. Prior to Apple Pay’s launch in October, customers were happy to pay with their magnetic striped credit cards, accepted at virtually every retail POS. For many, the idea of moving to a mobile “wallet” was fraught with worry about data security. For example, in July, the U.S. Computer Emergency Readiness Team issued an advisory that more than 1,000 U.S. businesses have been affected by the Backoff malware, which targets point-of-sale (POS) systems used by most retail industries. That’s a lot of worry to go around.

In addition, some consumers had tried mobile payment apps, and were frustrated and disappointed. Even the uber-popular Starbucks system can get hung up on a finicky scanner. So the message from consumers is loud and clear: If it’s not secure and intuitive (i.e., easy), we’re not interested.

Apple Pay may have overcome those hurdles. For now, it is focused on providing secure mobile payment for consumers, in an efficient, simple manner, via Near Field Communications (NFC). It works with credit card companies, rather than around them, as CurrentC does. But, while Apple focuses like a laser beam on transactions, CurrentC incorporates customer information, including loyalty benefits. That could make for a complicated, though more complete, rollout for CurrentC. Meanwhile, Apple does plan to include more features in the months ahead, but has chosen a more integrative approach.

The credit card companies typically charge 2% to 3% of a given transaction to the merchant; CurrentC saves that fee normally imposed by credit card companies from the payment process by circumventing them and using automating clearing house (ACH) payments. However, in an online introduction to Apple Pay, the company said it won’t charge users, merchants or developers for transactions. It’s likely that Apple is collecting a fee for each transaction, but mum’s the word on those details right now.

It is interesting how Apple forged the partnership with the three biggest card networks, Visa Inc., MasterCard Inc. and American Express Co., to process payments. As a former vice president of a large upscale department store explained to us: “Apple’s negotiation and techno-skills won them the distinction of having Visa, MasterCard and American Express recognize Apple Pay as a ‘Card Present’ transaction, which will definitely be a big disrupter in the payment ecosystem. This is especially true if your payment solution doesn’t produce the single-use cryptogram and Token thus relegated to the more expensive ‘Card Not Present’ space.”

But there is that pesky issue of security. Users with Apple Pay installed on their phones have very little to do a locked phone held over the payment terminal wake up with a finger on the TouchID scanner and the transaction is done momentarily. It might take a bit of persuasion to convince Mr. and Mrs. America that their credit card numbers are not floating around in cyberspace.

“I was directly involved in the early deployment of Google Wallet at a large national retailer, and I agree that adoption was impacted by low consumer confidence in the security and the high concern (quite justifiably) that their purchase histories would be sold,” the department store exec said, noting that Apple has publicly stated it doesn’t collect purchase history. So, not only does Apple not know what was bought, it doesn’t know where you bought it or how much you paid for it. “Assuming that is true, which is actually harder to do than you’d think, that would address a big part of consumer fears. From a technology perspective, Apple has combined multiple on-phone and in-network security strategies to deliver one of the most secure payment methods available. That said, most consumers — especially those who already mistrust big banks and big business — don’t really understand the security measures that have been in place for years. Even the Apple faithful have recently lost a little confidence with the recent iCloud exposures.”

Although consumers are becoming more comfortable with the idea of mobile commerce and payments, the average consumer needs reassurance that these systems are safe and secure. It’s one thing for a customer to use mobile payment method at Starbucks for a $4.52 grande caffe latte, and another to use it to buy a $850 48-inch plasma television. A retailer must be prepared for both transactions.

This entry was posted by Jennifer Bosavage on Friday, November 7th, 2014 at 7:27 am .

The retail sector has become more digitally driven in recent years, adopting a breadth of new technologies that have helped bolster intelligence related to trends, management optimization and more. Software, as well as advanced payment processing tools, have been two of the highest priorities among decision-makers of late, and for good reason, as these investments have been found to strengthen operational and financial performances. 

However, some analysts and researchers have feared that demand would begin to either level off or decline given how quickly retailers in several nations invested in the solutions, as is the case with virtually every high-impact technology that become commoditized. Luckily, retail management software markets are proving resilient, with demand growing in a breadth of nations and the future looking bright for more digitized operations in the sector. 

Big news in the UK
CSO Magazine recently reported that a study conducted by Martec and commissioned by a software provider found that nearly three-quarters of retailers in the United Kingdom are actively pursuing new technological deployments. According to the news provider, investment in retail management software and relevant technologies went down between 2008 and 2013 in the U.K., but this latest report indicates that the pedal is back to the metal. 

For one, the source pointed out that ecommerce systems were targeted by 26 percent of retailers in their current provisioning strategies, while the majority have at least one significant software-related initiative in the process of being deployed. Not surprisingly, upgrades to in-store and digital systems combined for another 26 percent of investments in this regard, driven by the need to remain relevant in an increasingly Internet-driven market. 

Finally, CSO Magazine pointed out that retailers are looking for more reliable systems, as many have been frustrated by bugs and other issues in certain products and services. 

Will this trend continue?
Research has continued to indicate that, even when demand begins to slow down, the market for retail technology, including intelligence and management software is going to move on an upward track for the foreseeable future. Retail decision-makers who have not yet considered investing in or deploying advanced technologies to streamline payment processing, customer relationship management and other matters should do so soon to remain competitive in the digital markets of today and tomorrow. 

With a more proactive approach to upgrades and overhauls, these businesses can often gain a competitive advantage over others in their fields. 

This entry was posted by Retail Pro on Thursday, November 6th, 2014 at 10:51 am .

Fear of data breaches at major retail outlets has bolstered demand for advanced information protection frameworks for POS systems.

A number of tech organizations are working to satisfy this need, with some employing new hardware configurations while others are leveraging strategic partnerships. While the environment may be diverse the goal remains the same: protect financial transactions. 

Collaborating in the name of defense 
Retail Customer Experience noted that Feedzai and Encap Security are working together to enhance each others' signature platforms. While the latter company specializes in mobile authentication, the former uses data analytics and behavioral profiling to detect and prevent fraud. The accord was created to make Feedzai's fraud deterrent platform cohesive with Encap Security's authentication program. 

"Consumers are using more devices to conduct financial transactions, and at the same time, are demanding more protection but with less intrusion into their commerce journey," said Feedzai CEO Nuno Sebastiao, according to the source. "Adding smart authentication and artificially intelligent risk engines on the back end offers safety without being obtrusive and penalizing good consumers."

As Sebastiao noted, shoppers are purchasing goods from a wide variety of devices at incremental parts of the day, often on unprotected networks. Collaboration between Feedzai and Encap is keeping this level of convenience in mind by placing much of the authentication responsibilities in back-end platforms, providing consumers with a quick but safe way to buy products. It's a principle that Encap Security VP of Business Development Adam Dolby cited as a chief concern of his and Sebastiao's organizations. 

No device left behind 
In a move that may surprise some companies, chip producer Intel recently launched a system capable of providing endpoint encryption of financial information, which can be built into POS software. Infotech Lead noted the solution reduces the amount risk involved with transporting data from POS devices to data centers hosting servers on which authorization programs are running. 

How does it work? It implements a protected pathway among the transaction endpoint, POS platform and server network whenever a purchase is initiated. While compatible with debit and credit cards using magnetic stripes, the technology also works with EMV and near field communication transaction readers such as Google Wallet, Softcard and Apple Pay. All in all, Intel Data Protection Technology for Transactions is cohesive with all retail POS platforms running off select Intel processors. 

These efforts are conducive to helping merchants bolster their security credentials. 

This entry was posted by Retail Pro on Monday, November 3rd, 2014 at 4:54 am .

It seems as if every month news of a recent data infiltration hits the presses, each one more disconcerting than the last. 

Some retailers have taken more extensive measures than others in regard to implementing effective information protection methods, but it's evident the U.S. executive body believes more can be done.

Going beyond Payment Card Industry Data Security Standards
Retail Customer Experience noted that President Barack Obama recently signed an executive order in response to the massive data breaches experienced by some of the nation's largest companies.

Appropriately dubbed "BuySecure," the endeavor will provide assistance to those who have fallen victim to identify theft, enhance the public sector's payment defense systems and jumpstart a broad transition to more robust security strategies and tools.

In addition, Obama intends to hold a White House Summit on Cybersecurity and Consumer Protection, which will transpire sometime near the end of 2014. The gathering will be comprised of those invested in the consumer financial arena so that they can encourage adherence to stronger protection obligations and detail future technologies that will better combat cybercrime.

Focusing on debit and credit cards
Overall, the document supplied by the Presidential office alludes to migration away from debit and credit cards that use magnetic strips and PIN numbers. This could lead to the use of EMV cards, which are equipped with microprocessors that contain encryption tools not available with traditional cards.

Yet, the benefits associated with EMV aren't expected to have a major impact on the U.S. after widespread use is implemented. In order for this transition to have the desired effect, retailers across the nation need to revise their ecommerce software and POS systems to accept EMV cards. Otherwise, EMV's features may actually cause more vulnerabilities.

PYMNTS noted PCI Council Chief Bob Russo's take on the issue, saying that EMV's widespread deployment will help in the long term, but may cause disruptions during the transition period.

"These hackers [will] take advantage of, at least in the face-to-face environment, getting this credit card data," said Russo, as quoted by the source. "As we saw in other, mature EMV markets, typically the fraud is going to go up before EMV becomes embedded here in the United States. So, get prepared, for fraud is coming, and it's coming very, very strongly."

Regardless of the executive order or Russo's affirmations, it's clear that merchants must take the initiative and implement stronger security features on their own.

This entry was posted by Retail Pro on Friday, October 31st, 2014 at 4:27 am .

Radio-frequency identification technology, new POS software security features, omnichannel distribution and a wealth of other factors are all taken into account when retail professionals think about what's in store for next year. 

Although the merchandising landscape was shaken by the explosiveness of the Internet near the turn of the century, the organized chaos that ensued as largely dissipated. That doesn't mean technology won't have an impact on the retail industry next year. 

Focusing on what the customer wants
Retail Customer Experience contributor James Bickers noted some enterprise leaders don't know how to regard trends appropriately. Whenever a buzzword comes to mind, such as "beacons" or "app," some professionals may be to eager to jump the gun. In other words, don't develop a mobile applications unless your customers asked for it. Believe it or not, there are some companies for which it wouldn't make sense to develop and launch such software. 

So, what do consumers want? Bickers referenced a survey conducted by the magazine, acknowledging a number of key points:

• The majority of shoppers (86 percent) believe that a retailer possessing an online channel is "important," "very important," or "critical."
• Just under half (45 percent) of respondents maintained shipping charges have a profound impact on which merchants they choose to purchase products from. 
• Exactly 63 percent of participants have downloaded a retailer's mobile app, a third of which maintain they rarely use them. 

The good word of others 
It appears that blog content is going to strongly influence how consumers choose to spend their money. Shoppers already take other people's opinions into consideration by looking at short reviews and ratings posted on product pages, so it makes sense that many are looking for more in-depth, expert critiques of select goods. Specialty retail companies, in particular, will need to pay attention to this trend. 

The American Genius spoke with Influence Central CEO Stacy DeBroff, who regarded the research her company conducted on consumer purchasing behavior. She acknowledged that 92 percent of mothers buy products after reading blogs posted by people who detail their experiences with said goods. In addition, 91 percent of moms trust blogs for accurate, honest information regarding items when researching them online. 

In other words, content reigns supreme. How can retailers use this to their advantage? Sharing these blogs on product pages may actually discredit the writers' good word. Find unique, indirect ways to connect with these pieces. 

This entry was posted by Retail Pro on Tuesday, October 28th, 2014 at 9:56 am .