7 Payment Trends for Retailers
As the fintech revolution gathers pace, retailers must have an eye on the key trends shaping the industry in order to stay ahead of technological transformation. Hansab’s partner Ingenico has listed seven key trends that will have an impact on retailers.
1. Omnichannel becomes omnipresent
The way that people shop is rapidly evolving and the boundaries between online and offline commerce is becoming more blurred. Omni-channel bridges the gap between the real and virtual world, although to succeed, two distinct types of transactions must merge – “card present”, which refers to in-shop transactions, and “card not present”, which relates to transactions conducted online or via mobile.
“We see the future of payment being mainly the addition of smart interactions with consumers. There are going to be more and more points of interaction. We’re quite convinced that putting payment in Internet of Things will create more channels so you’ll be able to interact on the screen, in your car, your TV - everywhere there’s intelligence,” said Michel Léger, EVP Innovation, Ingenico Group.
2. Shopping gets more social
Last year’s move by most major messaging apps including Facebook to share their APIs with third-party developers will drive growth in social commerce among tech-savvy consumers.
These interfaces can sell products to users without them having to switch applications – a crucial attribute reducing the barriers to sale and enabling a seamless consumer experience.
Messaging and social media are emerging markets for retailers. It’s important to enable those messenger applications to accept payments in those channels without pushing the consumer to escape from those messenger applications.
3. IoT payments go mainstream
Adoption of mobile and other Internet of Things-based (IoT) transactions increasing rapidly. Mobile and contactless payment will be worth three times more in 2018 compared to 2015.
The potential of smart watches and wristbands have excited NFC (near-field communications) stakeholders, although it’s NFC-enabled smart phones that will deliver the overwhelming majority of revenues, at least in the near-term.
4. POS gets a makeover
Many retailers have failed to keep up with the tech advances that are transforming the concept of POS, but that is about to change as stores increasingly move away from the traditional checkout model.
Some retailers will start selling commoditized, high-volume products at unattended kiosks, while other means for customers to avoid checkout queues will also become a more common sight.
5. Developers lead next generation POS apps
In 2016, first Visa and then Mastercard and American Express launched open platforms so that developers could use the credit card firms’ respective APIs to create new payment applications and software.
The fact that financial institutions released this proprietary data shows that without partnerships and collaborations with fintech firms they cannot keep pace with their rivals that do.
With new open platforms that are available, we will see app developers bring in the next generation of innovative payment and point of sale applications to the market.
6. Security encryption is increasing
Security concerns were the most commonly cited reason for not using mobile payments, according to research by First Annapolis Consulting.
Yet mobile wallets use tokenization and encryption technologies that actually make mobile transactions more secure than swiping cards through magnetic card readers, and understanding of these increased security features set to rise among consumers in the near future.
Tools such as point-to-point encryption (P2PE) and tokenization will become more widespread, for mobile and credit or debit transactions alike.
7. Mobile wallets proliferate
The number of mobile wallet options will continue to increase until a clear “winner” takes over the market. Among the most popular in developed markets are Apple Pay, Android Pay and Samsung Pay – all of which are only available on mobile devices produced by that manufacturer or using that operating system.
“It’s not something consumers can use everywhere but what you’re going to see happen is mobile wallets will become more than just an alternative way to pay. It’s going to be tied to loyalty offers and you’re going to see for the first time a benefit to the cardholder, when they’re using a mobile wallet,” said Greg Burch, VP of Strategic Initiatives, Ingenico Group North America.
Source: Ingenico Blog