Digital technology is moving the human race forward in leaps and bounds. Consider the decade or two it took to progress from the first Apple and Microsoft desktops in the early 80s, to laptops, smartphones, tablets and other gadgets of the early 2000s. Now, it seems like the minute an idea is formed, it becomes a reality in the blink of an eye.
Digital payment processing is quickly overtaking traditional methods. Cash is so rarely used that few outside retail would be able to tell you what a current bill even looks like in most developed countries. Security risks abound as we step away from cold hard cash and EMV secured debit and credit cards into “cyberspace banking.”
However, this is what consumers want and if you’re in the game of making money, you better step on board or get left on the sidelines.
Our friends at Pivotal Payment, a company specializes in setting up the payment processing system for SMEs share the following payment processing trends to watch out for this year:
1. Instant payment processing will become the norm
Have you noticed how much faster your third party payments are recognized by your payment processor and bank (PayPal transfers, for instance)? Credit card companies are updating their information faster, too, with the average purchase being debited from an account same day. As digital communication continues to improve, payments can be made and recognized faster than ever.
2. Data security continues to evolve in leaps and bounds
2018 is the year when more and more customers demand instant payments from one account to another. Rather than using their secure, yet interest-heavy credit cards, consumers want to transfer money from their savings or chequing account to the next to make their on and offline purchases. Banks and other payment processors will need to update their security, using advanced EMV tokenization in order to mitigate the increased risks these transactions create.
3. Merchant pay apps continue their rise to the preferred method of payment
Customers want what they want, and they want it now. The convenience of walking into a store or restaurant and paying for a purchase with one’s phone is fast gaining popularity, with over half of all consumers preferring to pay via a proprietary merchant app. It’s estimated that Walmart Pay will soon be America’s number one used merchant app. Customers can scan a product’s barcode with their phone, instantly pay for the item, then walk out the door without having to stand in a lineup (which will also spark a retail layoff trend the likes of which we haven’t seen ever in history!)
4. P2P and voice command tech align
College students around the world will rejoice as Apple Pay Cash, WhatsApp and many other P2P processors allow anyone in the world to send you money over chat platforms. A simple voice command to Siri, Alexa, or Cortana makes instant voice-activated money transfers a reality, rather than a far-off fantasy. Your loved ones will never have to suffer days waiting for snail mail and money transfers to execute again.
5. “Smart” technology spreads to endless devices
We’ve already seen the rise of smart devices that allow us to make seamless payments from anywhere. Now, other devices such as smart fridges, allow consumers to set reminders and even have depleted items such as milk, eggs, veggies and fruit automatically restocked and paid for. Other industries are following suit, such as car manufacturers integrating in-car displays with a consumer’s payment processor to pay for gas purchases, car washes, and more.
6. PoS popularity will dwindle into an abyss, never to return
With all that’s been mentioned already, in combination with other emerging tech such as embedded microchips, traditional “cashiers” and the PoS systems they help operate, will continue to dwindle in numbers. It’s conceivable that one day eye or DNA scanners will facilitate every action a human being wants to make, when personal identification is a requirement. This offers major convenience for shoppers, big savings for retailers, and an uncertain future for retail workers.
What does all this mean?
The constant state of changing payment trends is presumably leading the human race to a better place than it is today, certainly better than a decade ago.
However, debate persists everywhere…
The ability to make and process a payment has never been easier than it is today. Yet consumer preferences are placing a huge responsibility (burden) on banks, third party processors and the security professionals they employ, to keep their customer’s cash and data safe.
Instant payment options, such as merchant pay, also help spark more impulse buys and prevent consumers fearing the cash register due to shyness or an “unreasonably” long lineup. This technology will also hurt retail workers because many of these jobs will become obsolete in 2018 and beyond.
Regardless of how any of these trends may impact individuals and industry as a whole, good or bad, digital technology will continue to make payment processing faster and (hopefully) more secure as encryption and EMV tokenization methods continue to improve.
How do these trends make you feel moving forward?