Technological advance coupled with a growing focus on customer security and convenience is changing the dynamics of payments industry globally. Be it money transfer through a Facebook message or even consolidating your bank transactions on your smartphone, rising use of digital transaction platforms to increased popularity of chip-based card transactions, we see a continuous chain of focused innovation driving the overall growth
The payments outlook for 2016 look like it will be a milestone year in terms of consolidation. The payment industry faces the ongoing pressure of acquiring new users to expand customer base and increase standardization of mobile payment gateways. While P2P solutions is a common feature for most credit card providers, many like Visa allow P2P to only send payment to Visa. The task is to remove these unnecessary friction points and improve the transaction experience.
Most e-commerce giants consider the current payment trends old fashioned. They believe that things and mindsets are likely to undergo drastic changes by 2020. Payments could increasingly shift to the background while loyalty programs could step up to offer a better consumer experience. Banks would save huge overhead cost, customers would pay less transaction fees and the retailer would significantly reduce payment related hassles and make the process more transparent.
Focusing on the Consumer Connect Experience
In retail, establishing efficient consumer connect experience is another major trend to watch out for going forward. From linking payment related parties to innovative engineering partnerships, the list of possibilities is long and is being constantly explored. New ideas and ways to engage with the customers better are being continuously probed.
Retailers and customer service providers are continuously looking at tap into the precise moment when a customer decides on a product to increase both payment volume and the user base from a resulting transaction. The idea is to make payment method painless, transparent and convenient that it ceases to be a roadblock in any format.
Dealing with the EMV Challenge
A higher EMV awareness seems to be one of the fundamental factors driving payment parameters going forward. Currently, about 73% of consumers undertake payments without a chip in their wallet. The need to educate consumers is more important than ever to enable security features to their account.
Certification of products and payment gateways are both extremely difficult. Going forward industry leaders have to address the growing need for certification in a more comprehensive manner to ensure a higher amount of implementation. Statistics indicate that EMV implementation has led to significant fraud reduction and a sizeable fraud migration to non-EMV countries. As a result, better encryption and safety procedures will also ensure higher usage of the platform.
Additionally, better implementation will lead to reducing price points amongst various bank charges. This reduction will also become instrumental in making them more widely accepted and create a simpler user interface for easy access in case of both front-end as well as back-end processes.
What’s in store for the payment industry in 2016? Well, experts say the two biggest trends appear to be better regulation and a wider consolidation in the payment space.
Consumer Financial Protection Bureau is expected to introduce better guidelines and norms in the merchant cash advance payment market to not just add additional security levels for the consumers, but also make the process far simpler than its current configuration.
By consolidation, bringing in various payment gateways under one umbrella to not just make it more convenient for the user but also limit related charges and procedural obstacles. More widespread use of contactless and manufacturing NFC enabled payment devices that add to the overall payment experience. Companies which are at the forefront of innovation like Google, Apple and many others are seen working on applications and technological aids that could help facilitate it further. 2016 will see greater internet penetration in emerging markets, cheaper smartphones and use of mobile phones as a primary device for payments in retail and in the case of utilities for a seamless follow-through process.