At the start of every new year professionals all across the various markets like to talk about, and even make predictions about, what we can expect in the year ahead. We in the payments arena always, always, have our eye on the advancements being made to help merchants and consumers alike enjoy a frictionless experience. Many of the advancements people are excited about have lives of their own but also overlap into the lives of the retail industry and the payments industry alike since they tend to go hand in hand.
Here are some of the trends and predictions that we wholeheartedly agree will be shaking things up for our clients and the payments industry as well.
Real Time Everything–Right Now!
Real time everything but especially payments. Instant bank transfers are picking up steam worldwide and America won’t be left behind. For instance, isn’t it annoying that you can get gas or make a payment to your credit card and see it come out of your account right away but when you return an item you are told your refund will take 7-10 days to hit your account? What the..? Countries around the globe, including the UK, Singapore, and Australia have been implementing new payments infrastructures North America will have no choice but to make the effort to stay caught up. But it won’t just be in the world of retail payments or P2P payments that are seeing strides in faster payments.We will also see new infrastructure in the world of earned income payments. Employees want their money faster. They no longer want to wait for a paycheck twice a month but are beginning to see a world where they can be paid every week at the end of the work week and even AS they earn their money. Payment on demand will be making strides in the coming year. Walmart rolled out an employee payment program where employees are allowed to access up to 50% of the wages they have already earned and request an “instapay”, or instant payment of those earned wages prior to the actual payday. PayPal also launched their new program, Funds Now, which gives merchants access to the funds they earned through credit card sales transactions almost immediately rather than having to wait for their account to be funded in 24-48 hrs like usual.
Mobile readiness will be much more prevalent.
Business owners will have to make strides in making their businesses more mobile ready. Why? Because it’s expected by Generation Z. This is the generation born between 1996 and 2010 and will account for a whopping 40% of consumers within the next four years. While the oldest of this group are only in their early 20’s, a large portion will be entering the workforce over the next four years and will have the expendable income to drive commerce. Not to mention the entire generation has grown up in an era of internet and mobile devices and don’t really know any other way. Not just fast, but secure, frictionless retail and banking experiences aren’t just something they think business should employ, it’s just expected.
Millennials and Gen Z are also the least cash carrying generation and they are not about to start now. With the mobile ready implementations we have already started getting used to using in our daily lives it is also just much more convenient than ever before to pay with alternate forms and not get stuck without any cash. A person can order a ride and pay for it with their phone, order and pay for pizza delivery, even small vendors usually prefer patrons pay with a card, whether with a mobile wallet or not, that the vendor is set up to accept through their own phone (Square reader, PayPal etc.).
Tracking in the physical world
This trend overlaps with both Big Data and AI, but speaks to where it is being employed. The question is will this be viewed by consumers as an enhanced service or Big Brother? We already identify and tract devices but what about people? When you access the internet with your laptop, a tablet or your cell phone there are ways that it is able to detect not only exactly which type of device is being used, laptop, tablet or phone, but also where the device is located. But so far, we haven’t entirely put this practice into the physical world. But with advancements in AI many business will have the ability to passively track customers, possibly without their knowledge, in order to gain insights into their buying habits and employ more targeted marketing strategies. For example, assume a consumer uses the Kohl’s app and has given it permission to run in the background and “know where you are” even when not using the app. As the consumer walks into the store the app is aware you are now inside a Kohls, facial recognition tracks the consumer as they make their way around the store and sends data to the app in real time. They are able to measure which departments you are interacting with, how long you are in each department and what types of products you are interested in. Now the app is able to target ads to the specific things you are interested in, send you coupons or notifications of sales on those items and even make offers while you are in the store. All in real time. The belief is that this will not only result in more personalized advertising but also a more personalized experience for the consumer, but some people may just feel like this is a way for the business to capitalize on the data they are gathering and doesn’t really benefit the consumer.
Consumers will continue to use facial bio metrics in our mobile applications with more crossover into both the payments space as well as banking. We already use facial bio metrics everyday to unlock our phones, but we also use this technology to create a seamless experience with our banking and payments apps. As people are becoming more comfortable using this type of secure sign in for both of their bank and credit card apps they will also become more comfortable with this technology for other types of uses. AI will also be the driving force in the evolving work space where the office is going to start to look very different then what most of us are used to.
The office becomes an ever evolving “work space”.
Employers are looking at the wellness of their staff as a top priority as a way to improve the success of the business as a whole. Automation software will continue to take over repetitive tasks leaving employees freedom to focus on more important things that require the creative thinking of the human brain. The work space will no longer have to be a specific space. With the implementation of AI, its back office capabilities and inter-connectivity will allow employees and employers alike to view the work space as anywhere they are, multiple physical locations as well as a “work space” that is located purely in the digital world. AI will not only become more commonplace in the office, in the back office, but also in our homes. Since AI learns it will become better at predicting our behaviors making it much more useful to the everyday person. Machine learning allows AI assistants (Alexa, Siri) to learn how to understand and ultimately communicate with their human users through use over time. As we continue to interact with these devices they will become more natural and fluid in their interactions back becoming a more integral part of our everyday lives.
Data…Big Big Data.
As cities across the globe become more connected and the internet of things expands, data will be the value commodity that arises from it all.
When it comes to running a business, understanding how valuable data is means that business owners will need to start taking a data-driven approach to every aspect of their business in an effort to create a competitive advantage. When starting a business, how to track and manage data, who will manage it and how the insights derived will be utilized will be an integral part of the core business strategy. When it comes to payments, the data that is derived from the ecosystem is the most valuable part. And where there is something valuable (like data) there is someone willing to do anything to get it (hackers).
In the payments world we say all the time, the better we get at creating security measures for payment avenues that can’t be hacked the better the hackers get. With the recent revelation of the apple facetime hack it is plenty apparent that hackers love a challenge and I’m sure that won’t be any different this year. Hackers are getting more and more savvy. If they can hack into large corporations with powerful security then SMBs will need to pay attention step up their game to protect themselves. And if these commerce sites can be hacked so can everything else. We’ve already talked about how there will be advancements in AI but what if that too were hacked. We are relying on the accuracy of AI, but if it were hacked it could be made to do anything. For instance AI algorithms are used to learn from data and detect fraud but if a hacker were able to attack that learning ability and the data the algorithm it uses to learn they could wreak havoc. Hacking can also mean different things in different applications. It’s not just about hacking in to steal a consumer’s personal information or credit card data. What about hacking into a person’s psyche to make them do things? If you were not under a rock since the last election you know that there is the never ending saga of the Russians taking over Facebook ads to try to sway our opinions. This type of targeted ad is a way to coerce the public into doing what they want us to do. Malicious bots can be programmed to tempt people into clicking on links, enter private information on a site they believe is legitimate, take over the “real” chatbot on a site, really almost anything.
Security naturally then is where the next advancements will be focused.
It is impossible to ignore the fact that data security is a critical problem.Developers are beginning to realize that it they must start to address data security in the beginning of the development process. They will begin to build security features into the code level that will make it harder for hackers to gain traction. This will lead to a more serious approach to governance, where there will need to be stricter rules and framework to protect the integrity of your financial system.
Blockchain will make strides toward the real time payments world – finally.
Blockchain in the payments world hasn’t really been able to come to fruition with the difficulties resulting in minimal transaction volume, but signs point to the beginnings of change in 2019. Heavy hitters such as Ethereum and Bitcoin are making changes to the infrastructure to address the challenges that have halted widespread adoption. We’ve also seen major players join the game. Names like IBM and Goldman Sachs are backing currencies that are more stable due to their ties to the US Dollar and a current established economy instead of the ups and downs of the current cryptocurrency economy.
At Bankcard Brokers our dedication is to our clients. In order to provide the most innovative technology and services available we constantly have our eye on emerging technologies that can benefit the industry. We know that entrusting your income to a payment processing company is a cautious decision. We aim to earn our clients’ business by becoming a trusted resource and providing clients payment processing with integrity and complete transparency while providing superior customer service.