Payment Processing Solutions Market

Increasing developments of government-centric digital payment processing solutions

The global payment processing solutions market is currently experiencing huge investment by the government bodies in research and development of country-specific payment gateway to effectively monitor the transactions and financial fraud through scammers. This would help government organizations in effectively maintaining the economic and financial body of the country. 

In December 2018, UAE launched new integrated payment systems by 2020 to support all national and operating banks in the UAE. This initiative would help the government in protecting the country's financial system and ensuring the sustainability of cash flows.  Currently, Sweden’s central bank is developing an electronic currency as part of an initiative to provide a secure payment system to support a cashless economy. The initial focus is on development of e-Krona that consists of prepaid value, without interest and with traceable transactions.

In November 2018, Europe Central Bank launched Pan-Eurozone instant payment service TIPS to cater the growing consumer demand for pan-European payment services which is safe, efficient, and easy to use.

In April 2019, European Union funded a digital platform based in Poland to provide a secure payment method. The current payment processing platform will use block-chain technology to create accounts and make low-cost payments with real currencies.

Global Payment Processing solution market is a highly regulated industry since it deals with sensitive and private personal financial information. The regulations designed by various government and non-government organizations are focused on protecting all parties involved in transactions which includes cardholders, merchants and processors and issuing banks from identity theft and fraud.

The regulations that directly affect merchants include IRS Mandate (Section 6050W), Durbin Amendment, and PCI Compliance.

IRS Mandate:

• The IRS Mandate went into effect at the beginning of 2011 and it significantly affects the card industry. Under this mandate all payment settlement entities including merchant service providers and financial institutions should report their annual gross payment card transactions processed by credit, debit or co-branded cards and other third party networks to the IRS on newly provided 1099-K forms. 
• Merchants failing to provide their taxpayer ID could hit with backup withholding upto 28% of their gross payments card transactions.

Durbin Amendment:

• Durbin Amendment was part of 2010 Dodd-Fook Law which majorly focused on lowering the interchange fees imposed over customers during their purchase through debit card. 
• Through implementation of the Durbin Amendment by the bank groups, the fees on deposit accounts increased by 3%-5% and these fees were termed as monthly account maintenance charges, insufficient-funds fees, and inactivity fees.

PCI Compliance:

• Payment Card industry Compliance refers to the technical and operational standards that need to be followed by businesses to ensure that credit card details provided by the cardholders are protected.
• The security policies adopted by the major card processing solution providers in to maintain the regulation provided under PCI Compliance includes American Express-Data Security Operating Policy, Discover-Discover Information Security and Compliance, MasterCard-MasterCard Site Data Protection (SDP), and Visa-Cardholder Information Security Program (CISP).
• The PCI Compliance specifications required to be followed by the participating companies to ensure the data that has been processed both internally and externally is secured.
• The six category of requirements that need to followed by the participating companies includes:
• Build and Maintain Secured network and systems, protect card holders data, Maintain a vulnerability management program, implement strong access control measure, regularly monitor and test networks, and maintain information security policy.
• These regulations are strictly designed to protect the customer data and their financial transactions and their digital accounts from cyber theft or cyber attack.

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