A vast majority of people still align artificial intelligence with sci-fi dystopias. However, truth be told, that characterization of this disruptive technology is waning down…
Since the birth of electronic commerce, global card payments have been the technological pillar of a rapidly expanding electronic market and digital way of living. Newer communication channels have led banking industry to profound modernization. But with unprecedented technological innovation, changing business needs and an increasingly demanding regulatory framework, many layers are added while analyzing the dynamics of cards and payments industry.
An industry which involves hard-earned money of people- be it a common worker or a millionaire businessman – is vital in every way to the economy of any nation. Payments and cards industry has certainly revolutionized the conventional monetary exchange system. Considering the ancient barter trading from the chapters of human history, present-day card payment system truly symbolizes digital and technological renaissance.
Below are the 10 key trends that will shape the payment industry in near future:
Growing Impact of Generation Z
Around 70% of Generation Z (those born between 1995 and 2012) daily use a banking application on their mobile device, and 68% of them are interested in making P2P payments instantly. This generation demands immediacy, highly personalized experiences and uses different channels at its disposal more than any other generation. As a result, this generates trends in banking and payments around the world.
Spread of Mobile wallets
Finally, mobile wallets are ready to flourish, and this is because Open Banking and APIs offer the ability to improve the user experience with rewards, delivering instant messages, among others. Methods of e-Commerce and m-Commerce, either through applications or through one-click web purchases, are becoming increasingly popular. The acceptability of mobile wallets could be on the verge of significant growth in 2019.
Safety through Biometrics
Security based on biometric technology has existed for several decades, but it is only a few years ago that it has become common in consumer products (for example, in smartphones). Its use adds an extra layer of security to mobile payment systems. Once installed, these systems eliminate the need for passwords and could authorize with only one fingerprint, or with a glance, the payment processes with credit or debit cards.
Rewards Driven Approach
About 48% of consumers are willing to change their primary card if there is one that offers greater rewards. According to a survey, 66% of consumers want to be able to redeem points when they pass their card through a payment terminal (POS).
This offers a great opportunity for players involved in the payment industry to deliver rewards that fit the lifestyle of consumers and reach them in real time without any inconvenience.
Universal Payment Processing Channel
Since most merchants manage multiple formats and retail channels, a payment processing genuinely based on omnichannel will unlock significant efficiencies. This includes advantages like reducing enrolment times and improving customer loyalty with the merchant, and increased sales efficiency; eventually attaining overall satisfaction of the customer, improved after-sales service and fraud mitigation.
AI – A Game Changer
There’s no field of contemporary business world is left untouched with the wondrous applications of Artificial Intelligence (AI). From highly complex space technology to common mobile applications, it is swiftly integrated into our lives. Chatbots are such a comparatively lucid form of artificial intelligence and are revolutionizing mobile transactions. They can prepare and execute basic transactions with the approval of the client. Using simple voice commands, financial chatbots can transfer funds to other clients and provide basic financial statements.
The Data Takes Centre Stage
The banks have a hidden treasure within reach of their hands, which contains the information of the payments made by the cardholders. With the growing competition from non-banking institutions, banks must focus their financial and strategic muscle on the development of real time predictive analytics tools in order to remain relevant. Today, consumers have access to countless forms of payment, which is why the purchasing and payment habits are changing. Analysing customers’ financial behaviour to deliver a whole new sophisticated experience is something that can give organizations edge over others in this competitive domain.
Collaboration between Banks and FinTechs
The key to expanding the payment ecosystem lies in the collaboration between financial and non-financial organizations. Instead of building from scratch, creating partnerships between different financial services through APIs and other digital technologies will provide better payment experiences for consumers. This trend would be a dominating factor in developing economies pertaining to the fact that they have more scope due to unavailability of such collaborations.
Next Generation Infrastructure
Payment processing from the back-end is lagging behind in innovation due to legacy systems and regulatory compliance. Already financial institutions began to recognize that their internal systems prevent them from responding quickly to market changes, and it is expected that by 2020, payment processing undergoes a significant transformation to make way for the next generation infrastructure. Adopting with changing times is necessary to survive and thrive.
Adoption of Blockchain Technology
No matter how turbulent and unorthodox blockchain technology may sound from trivial payment systems, it is surely going to be a keystone in value exchange mechanism. Some banks might not have been able to take a distinct call yet when it comes accepting it with open arms. However, many of them do recognize the benefits that this technology can bring. It is likely that the financial world will move towards the adoption of Blockchain technology to implement it in different specific use cases, especially for payment processing and in different commercial functions.
The universe of payments and cards industry is constantly evolving. A series of significant changes in this domain is always expected with some time interval, thanks to the continuous technological advance. With further study and assessment, precise implementation of above-mentioned factors can be done to fulfil ever-changing consumer requirements. It is going to be evident for business organisations to keep an eye on the Key factors determining this industry’s overall journey in the future.