The Payments Future
Remember when the ATM was innovative? Insert a bank card, tap some keys, and get money instantly. Gone were the days of standing in a long line at the bank and presenting a withdrawal slip. Access your money when and where you wanted it.
Flash forward thirty years and payments can happen with the hover of a winter glove or the scan of a lapel pin or sticker. These payment innovations will debut at the 2018 Winter Olympics in PyeongChang, South Korea. Visa partnered with South Korean retailer Lotte to design and create the latest in payments wearables. The gloves, lapel pins, and stickers feature a duel interface chip and contactless antenna enabling instant authorization of payment.
What’s next for the future of payments? How far can innovation and technology drive the way customers pay for purchases?
Accenture’s 2017 North America Consumer Payments Pulse Survey of 1,500 consumers in the United States and Canada reveals that consumers are ready for payments innovation.
- 68% of Generation Z consumers, those born between the mid-1990s and the early 2000s, are interested in person-to-person payments – more than any other group.
- 61% of consumers welcome open access to their finances to view checking account or credit card balances when paying with any mobile app.
- 64% of consumers plan to use a mobile wallet in 2020, up from current 46% – a 39% rise in the user base.
The general consensus is that the evolution from paper bank withdrawal slip to ATM card to in-store payment terminals to payments wearables is a good thing. The largest drivers in the payments evolution are consumers’ willingness to embrace the technology, and in the payments infrastructure ability of payment processors to deliver a secure solution.
The Power of Generation Z
Gen Z comprises 25% of the U.S. population and promise to be real game-changers in the payments industry.
This generation has never lived without the Internet, Google, or social media. They are highly digital-literate and early adopters of the latest and greatest technologies. For merchants who sell to this demographic, being responsive to demands for mobile apps, digital wallets, and the blurred lines between social media and payments is critical.
Consider this revelation from the Accenture 2017 North America Consumer Payments Pulse Survey: 80% of Gen Z would give up their television for a day – and 28% would give up friends or money just to keep their mobile phone.
Shared Data Analysis
Today’s consumers are not naïve, they know that their data is collected, analyzed, and used to tailor messaging to their specific buying habits. While there are underlying trust issues, most consumers accept that this vast amount of data enhances their shopping experience.
For merchants invested in omnichannel, m-commerce, and e-commerce, this points to maintaining a focus on delivering the ideal customer experience. Customers know the data is there – and they expect to receive a personalized and customized browsing, shopping, and payment experience. Merchants must also know how the customer wants to pay from their device of choice and make available account credentials across all devices.
Mobile Wallet Push
There has been a lot of buzz about mobile wallets and how the industry will adopt this emerging technology. By examining what is happening in China, we can gain insight into what will soon happen internationally.
China has consistently been ahead of the curve with technology and communication adoption rates, making it a truly mobile-centric nation. Alipay, a major Chinese payments leader, has developed mobile solutions that support their estimated 520 million active customers.
By partnering with major payment providers, including First Data, Verifone, Payworks, and Stripe, Alipay enables consumers to use mobile wallet technology wherever they are. Alipay supports 27 currencies in 30 countries, driving how Chinese consumers, and soon North Americans, will pay for purchases.
Staying Afloat in the Evolving Payments Future
Admittedly, we have only scratched the surface of what is happening in the world of payments. This is an exciting time to be involved in how consumers, merchants, and banks support and drive e-commerce. The entire transaction life-cycle is tied to payments – security, fraud prevention, data analysis, marketing, growth, and revenue.
This payments ecosystem requires merchants and their banks to be flexible and agile when it comes to doing business. The fear of missing out is real– wait too long to integrate mobile wallet technology or to deliver a personalized shopping experience and customers will leave.
Merchants need to understand how to prepare for the evolution of payments to meet customer needs. Verifi has a deep understanding of trends in the payments industry and can be a source for planning future strategies. Contact us to learn how you can prepare for consumer demands, bank expectations, and the ever-present fraud risks lingering in the background of this exciting payments universe.