Not long ago, checkout line clerks asked “cash, check or charge” more often than “paper or plastic.” But with double-digit declines in cash and check usage at the register, electronic payments have become the ubiquitous way to pay. And because more than 70 percent of the $5 trillion in annual U.S. payments transactions flow through Georgia businesses, that’s great news for the state’s position among the nation’s financial technology hubs.
Merchants in the U.S. rely on electronic payments as the fast, reliable and safe way for customers to pay. And U.S. consumers carry 1.2 billion debit, credit and prepaid cards in their wallets because they rely on electronic payments for the safety and security of their transactions. With new innovations in payments coming to market, it’s important to recognize the role that Georgia companies play – and to ask what can be done to grow the payments industry here.
With financial technology company revenue of more than $34 billion, Georgia ranks only behind New York and California in the exciting and dynamic world of payments technology. More than 85 billion payments transactions pass through the systems of Georgia companies each year.
Our industry is in the midst of the most significant upgrade in payments technology since the magnetic stripe credit card was introduced more than 40 years ago. We are deploying new chip-enabled credit and debit cards to prevent the creation of counterfeit cards, which represent more than two-thirds of retail payments fraud today. We are also deploying new tokenization technology, which replaces account numbers with cryptographically secured tokens that cannot be intercepted and used to commit fraud. And point-to-point encryption technologies, deployed at the merchant point of sale, ensure that payments data is protected against interception as it moves across computer systems.
These more secure technologies are further bolstered by new mobile payments solutions that permit use of biometrics and other security features. The future of payments is more secure and robust.
The new Congressional Payments Technology Caucus counts among its founding members Georgia U.S. representatives David Scott and Lynn Westmoreland. Senate Payments Innovation Caucus co-founder Johnny Isakson said that the “thousands of Georgians employed by this industry in my state will benefit from a caucus focusing on new technology development in an industry experiencing explosive growth.” That’s no exaggeration: payments companies directly employ more than 25,000 Georgians.
Georgia companies like First Data and TSYS enable “tokenization” of payments services like Apple Pay, Android Pay and Samsung Pay, replacing traditional card account numbers with one-time-use tokens that cannot be stolen by cybercriminals. Fintech companies like InComm are providing unbanked and underbanked consumers in the U.S. (more than 35 million, according to the FDIC) with prepaid card products that empower savings and stability through innovative financial tools. Payments processors like WorldPay and Global Payments are enabling new point-of-sale technologies and working with developers to deploy technology solutions that drive merchant sales.
Home to some of the finest educational institutions in the nation and a slew of startup incubators, Georgia offers unparalleled opportunities for young technology professionals. Yet Georgia continues to lose too many promising students to Silicon Valley and other technology hubs. This trend has the potential to stifle the growth of Atlanta’s vibrant fintech sector.
Fortunately, the Electronic Transactions Association is partnering with the Technology Association of Georgia to bring the payments technology industry together in Atlanta so that we can find the best ways to develop and retain talent right here at home. Together, we are working to get the word out about the amazing opportunities available for the next generation of payments innovators.
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