The 1 Thing the Evolution in the Payments Needs to Succeed

As a result of the theft of data from millions of consumers at Target, many have understood changes are coming to Visa (NYSE: V  ) and MasterCard (NYSE: MA  ) and countless other firms in the payments industry.

A coming revolution
The headlines surrounding the data breach at Target are easy to remember. Millions of card numbers stolen. Improper security practices revealed. Countless questions raised. And apprehension and nervousness from consumers seemed rightly in place.

As a result, many have come to see more needs to be done in order to protect consumers and their data.

But the changes to the industry have been quick, and the revolution is here.

Source: Flickr / Guerrilla Futures | Jason Tester

Rapid change
Just last month, investors learned MasterCard and Visa have formed a group to allow for the changes in payment security to be accelerated. The group has membership and partnership from firms across industries -- from banks, credit unions, retailers, and countless others -- and is aiming to ensure the industry itself is safer.

"The recent high-profile breaches have served as a catalyst for much needed collaboration between the retail and financial services industry on the issue of payment security," noted Ryan McInerney, president, Visa, in the press release announcing the partnership. "As we have long said, no one industry or technology can solve the issue of payment system fraud on its own. These conversations will serve as a useful forum to share ideas, break down barriers and spur the adoption of next generation security solutions for the benefit of all."

It's easy to see the partnership and collaboration between Visa, MasterCard and others is a clear indication there will soon be major changes in the entire payment landscape, and it is easy to think these could occur within a monumentally short period of time.

Yet there is one thing investors need to be aware of about the changes ahead in the payments industry.

The important thing to remember
The payments industry is not a collaboration between just the firms which process payments -- the banks, credit card firms, processors. Merchants lie at the heart of it.

At the recent TRANSACT14 payments conference by the Electronic Transactions Association, Visa's Executive Vice President of Corporate Strategy, Mergers and Acquisitions, Government Relations and Europe, Bill Sheedy highlighted why large and small merchants -- who consumers purchase goods from -- too must buy into the changes that lie ahead.

After all, if the changes result in new technology to process the payments in a more secure way, merchants will likely have to pay for new terminals used to process the payments.

Following Sheedy, the vice president of product management at Google Payments, Ariel Bardin, concluded his keynote presentation by noting that partnership with more merchants is critical for the future of Google Wallet and its corresponding technologies.

The exciting future
There is no denying the payments industry is poised for monumental change in coming years, but the evolution of the payments industry will require buy in from not only consumers and processors, but the merchants, both large and small, as well.

Your credit card may soon be completely worthless
The plastic in your wallet is about to go the way of the typewriter, the VCR, and the 8-track tape player. When it does, a handful of investors could stand to get very rich. You can join them -- but you must act now. An eye-opening new presentation reveals the full story on why your credit card is about to be worthless -- and highlights one little-known company sitting at the epicenter of an earth-shaking movement that could hand early investors the kind of profits we haven't seen since the dot-com days. Click here to watch this stunning video.

Read/Post Comments (1) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2912159, ~/Articles/ArticleHandler.aspx, 8/28/2015 11:31:00 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Patrick Morris

After a few stints in banking and corporate finance, Patrick joined the Motley Fool as a writer covering the financial sector. He's scaled back his everyday writing a bit, but he's always happy to opine on the latest headline news surrounding Berkshire Hathaway, Warren Buffett and all things personal finance.

Today's Market

updated 2 hours ago Sponsored by:
DOW 16,643.01 -11.76 -0.07%
S&P 500 1,988.87 1.21 0.06%
NASD 4,828.33 15.62 0.32%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

8/28/2015 4:00 PM
MA $94.08 Up +0.03 +0.03%
MasterCard CAPS Rating: *****
V $72.46 Up +0.06 +0.08%
Visa CAPS Rating: ****