Setting Your Parking Operation Up for Success: Upcoming Financial Compliance Mandates for 2024
4 min read
Published on Parking Industry Insights
Author: Luigi Lato, Chief Operating Officer, Precise ParkLink
As we near the end of 2023, parking facility managers and owners must future-proof their operations by preparing for upcoming financial compliance mandates shaping the industry in 2024. With the digital payment landscape rapidly evolving, customers have grown accustomed to paying for parking using various payment options, including credit cards, debit cards, prepaid cards, and mobile payments. In research completed by the global market research firm Harris Poll, in partnership with Mastercard®, it was found that 68% of Canadian consumers are likely to use a digital wallet. Numerous parking facilities have begun embracing digital payment options at pay stations and parking meters to keep pace with this digital transformation. However, with the rapid growth of digital payments, governments and organizations are stepping in to regulate and standardize these transactions for the benefit of all stakeholders. Find out how below.
Interchange Fee Reduction to Boost Credit Card Payments.
One significant development on the horizon is the expected reduction of interchange fees for Visa and MasterCard credit card transactions, set to kick off in the fall of 2024 in Canada. These reduced interchange fees, anticipated to drop to below 1%, are aimed at encouraging the widespread adoption of digital payment methods using Visa and MasterCard. For parking facility owners, this move translates into optimized business revenue, representing an average 27% decrease in fees over five years.
Visa's Offline Plaintext PIN Support Ends.
Another important change on the horizon is Visa's decision to discontinue support for offline plaintext PINs, effective January 1, 2024, for new unattended cardholder-activated terminal (UCAT) devices. Parking operators must take note of this change and deactivate the offline plaintext PIN feature accordingly. By January 1, 2025, all UCAT devices must no longer support offline plaintext PIN transactions. This move by Visa underscores the importance of enhancing transaction security and aligning with industry standards.
Considering these upcoming financial mandates for parking in 2024, parking facility owners must take proactive steps to ensure compliance and maximize their revenue potential. Here are some key actions to consider:
Modernize Payment Systems for Enhanced Efficiency in Your Parking Facility: To adapt to the changing payment landscape, your parking facility's payment systems should be modernized to ensure that they can process various digital payment methods, including credit cards from major providers like Visa and MasterCard. Upgrading your payment infrastructure will meet customer expectations and, help streamline transactions and improve efficiency.
Safeguard Your Parking Business with Industry Standards: Enhancing transaction security is vital to protecting your business and customers. Implement robust security measures with industry standards, such as Regular Canadian Standard on Assurance Engagement (CSAE) audits and Payment Card Industry (PCI) compliance in Level-1 (highest level), to safeguard sensitive customer data. It can improve security in payment processes and enhance your parking business reputation and customer loyalty.
Strategize Fee Structures for Revenue Optimization: With the expected reduction in interchange fees, now is the time to evaluate your fee structures. Consider adjusting pricing models to account for these changes while remaining competitive. This review lets you optimize your revenue streams, ensuring your parking facility remains financially sustainable.
Ensure a Smooth Transition through Effective Customer Communication: Effective communication is also key. Keep your customers informed about any alterations to payment methods or security measures. Providing clear and transparent information helps maintain their confidence in your services and ensures a smooth transition to the new payment standards.
The parking industry is undergoing significant changes in response to the growing demand for digital payment options and enhanced security measures. By staying informed and adapting to these financial mandates, parking facility owners can position themselves for success in 2024 and beyond. It is time to embrace the future of parking payments and security.
References
Evaans, P. (2023, May 18). Visa and MasterCard agree to lower average credit card interchange fee below 1% | CBC News. CBCnews. https://www.cbc.ca/news/business/visa-mastercard-fees-1.6848082
Securing the Digital economy- protecting your business and customers from Cyber Crime. Moneris. (2023, August 16). https://www.moneris.com/en/insights/posts/fraud-prevention/securing-the-digital-economy-protecting-your-business-and-customers-from-cyber-crime?category=%7B73F11F64-E5E9-451A-B1FD-050A32A987C3%7D
Visa Merchant Business News Digest. Visa. (n.d.). https://usa.visa.com/support/merchant/library/visa-merchant-business-news-digest.html
Yun, S. (2022). Rebound and grow - Canadian payment methods and trends report 2022. Payments Canada. https://payments.ca/sites/default/files/PaymentsCanada_Canadian_Payment_Methods_and_Trends_Report_2022_En_0.pdf