Payments can be as fickle as fashion, sometimes. Some methods endure for decades, while others go the way of Jnco jeans and the scrunchy hair-tie. Being able to identify which hot new trends to focus on, and which are going to burn out before the end of the year, is crucial to pretty much any business taking payments in anything other than cash. But staying on the cutting edge of payments is easier said than done, so what’s a humble business to do? Well, turning to the people who live and breathe payment technology (that’s us!) is a pretty good start. So, with that in mind, here’s a few prognostications on the payment trends currently blazing trails across all things financial.
Taking it Easy
A pretty easily-identifiable marker of a soon-to-be popular payment trend is convenience. Not much beats ease when it comes to figuring out what consumers want from their preferred payment methods, and so long as it’s not wildly insecure, a newcomer tech that offers an increase in expedience is fairly likely to endure the test of time (that is, until an even easier competitor comes along). Take contactless payments, for example. You’d be hard pressed nowadays to find a UK citizen that doesn’t pay for most of their transactions with a quick flash of a debit or credit card. The dark days of inserting your card into a machine, waiting for the right connections to be made, and inputting your PIN are long behind us. Contactless has cut time-to-payment from 15 seconds to 5, which is a big part of why card payments are rapidly eclipsing cash as time goes on. Convenience is king, which is why contactless payments are absolutely essential to businesses operating in the modern day, and also why wearable payments might be worth keeping an eye on as time goes on (predicted to make up 20% of mobile proximity payments in 2020!).
The ‘Me’ Generation
There’s also generational shifts to think about. As everyone knows, millennials are keen on killing any industry they can get their hands on, and as Generation Z ages into relevance in the payment sphere, there’s no telling how the landscape is set to change. A running theme seems to be personalisation, the generations that grew up on social media are eager to tailor their payments to them, turning to highly tailorable P2P systems like PayPal.me and Monzo to move money between friends and family. It may be that the dominant payment platforms of the future are not just the most convenient, but the most customisable. Millions of Chinese citizens, for example, are already combining their social and financial data with apps like WeChat Pay, which turns a messaging app into a payment system and has quickly become ubiquitous in Chinese society. If Gen Z continues to look for opportunities to personalise their payments, we could be doing our shopping with Facebook Pay before you know it.
But convenience has to be balanced against security, especially when it comes to online payments. Online customers can still be pretty wary about handing their details over to a faceless online form, which means something like contactless payment might not be as quick to take off in the virtual world as the physical. So, what’s the number one indicator of a phenomenon in online payments? Versatility and capability. While a physical business can rely on its ability to handle whatever payment methods are popular in a certain area, online payment systems have to have the facility to deal with payment methods from across countries, continents, and even the world. That means handling mobile payment systems like Apple and Google Pay, digital wallets like WeChat Pay and Alipay, a multitude of national and international card schemes, all while being flexible enough to swiftly incorporate any new systems of payment that might take off in the future. An online payment system has to be both wide and deep, covering the world and penetrating regional markets by catering to locally-preferred alternatives.
As payments migrate further and further into a vast and interconnected network of competing and complementary payment systems, with an endless number of apps, card schemes, and other payment mechanisms proliferating by the day, it’s more important than ever to make sure your business is right on the razor’s edge of payment tech. Slipping behind carries the potential of alienating otherwise loyal customers and driving away huge numbers of potential payments. Being able to identify which trends are worth pursuing, though, and which are just a flash in the pan, could see a business rapidly transform into an industry leader in innovation, setting the example for everyone else and playing a key role in deciding the course of payments technology. And hey, your early-adopting customers will thank you for it, too.