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Question of the Month
How do I prepare my business for the factors that will impact payments in 2016?
We’ve got one more year under our belts and a fresh forecast of things to come in 2016. There is plenty of speculation about what will happen in payments this year but there are a few certainties. First, millennials are standing out as an influential bunch in payments. They love mobile, they’re willing to give up more personal information with the right rewards and they’re tech-savvy. As this group continues to prefer smartphones as a way to pay, mobile will increase in popularity and adoption will grow. This trend will move into emerging technologies as well, with more people using wearables for payments.
Here is what the experts are saying:
- Millennials are a driving force behind mobile payments. This group has been critical in impacting how companies go to market but they are also influencing how we consume products. It goes without saying that millennials are largely tied to their smartphones, and especially when it comes to using the to pay. About 41% have made a purchase from their smartphone and 52% have used the mobile phone as a payment device at the POS. This could have significant meaning for retailers looking to capture this part of the market, which will require a seamless experience delivered in real-time.
- Mobile isn’t slowing down. eMarketer forecasts a 210% growth in 2016 for the total value of mobile payment transactions – that’s an increase from $8.71 billion to $27.05 billion. BUT there is still a wide gap between awareness and adoption when it comes to mobile. The key for retailers will be establishing a clear value proposition in the form of meaningful incentives. The days of “rewards” loyalty are gone and a reinvention of these programs will be required to bridge the gap between awareness and adoption.
- Wearable technology and the Internet of Things (IoT) will pioneer payments. Smart devices and wearables for payments will gain momentum in 2016. While devices like FitBit have already become almost mainstream, we will see additional products like this hit the market with even more agile features. Apple Watch paved the way for wearables in 2015 and 2016 will only see more smart watches and devices released and purchased. This technology also opens to door to increased use of biometrics for payments authentication.
- Merchants can’t afford security as an afterthought. Between IoT, mobile and wearables for payments, merchants cannot afford to skimp when it comes to securing payments from end to end. Experian’s recent forecast shows that data breaches will not slow in 2016 and it urges business leaders to take note of these trends and adequately protect their business against hackers and threats. The fact is that breaches result in chargebacks downstream, which means that security measures should also include total chargeback management that stops preventable chargebacks and also recovers revenue on the backend. The best solutions utilize merchant-issuer collaboration to facilitate direct communication and resolution of disputes in real-time. Using a vetted Total Chargeback Management solution can give merchants complete protection from all types of chargebacks without turning away good sales.
2016 is slated to be a strong year in payments for merchants who pay attention to trends and proactively approach their business operations based on the information at hand. This will require omni-channel optimization and an agile payment processing operation that is built to meet current requirements and grow with a fast-changing industry. The ability to collect and utilize customer data will be important, but protecting that data will be even more critical. As hackers become shrewder and data breaches show no signs of slowing, merchants need to ensure that their security is up to par and that they have a system in place to prevent and fight chargebacks that may be incurred as a result of data breaches.
Verifi’s Total Chargeback Management solution combines our patented, award-winning Cardholder Dispute Resolution Network™ (CDRN) and Chargeback Representment (CBR) help protect your payments from expensive chargebacks across the entire transaction lifecycle. This comprehensive solution includes a prevention strategy that utilizes real-time notifications to stop unnecessary losses paired with a representment strategy to maximize revenue recovery on chargebacks that make it through. Start 2016 on the right foot and employ a comprehensive fraud prevention strategy that protects payments along every step in the transaction lifecycle.