The payments industry, one of the fastest changing sectors in banking and finance, continues to evolve at a rapid pace. The driving factors behind the development are digitalisation, new technology, changed customer behaviour and the introduction of regulations. But also, ever-growing e-commerce and mobile usage.
Today's traditional payment providers, such as banks and payment companies, are challenged from all directions. For example, other players such as retailers, card companies, fintechs, big techs and car manufacturers are now entering the payments game.
In an ever-changing and competitive market, it is extra important for companies to pay attention to trends that may affect their business. However, it is not enough to simply predict each trend, but also to understand what consequences they can have on the market.
Current trends which we believe are particularly important to investigate are:
1. Cross-industry strategic partnerships
Banks and retailers are forming strategic partnerships with fintechs and payment service providers in order to create new, innovative services and solutions, for example:
- PayPal is helping Uber develop a digital wallet.
- American Express offers special rewards for B2B purchases made on Amazon.
2. National real-time payments become cross-border
A growing number of cross-border services and initiatives are being developed to facilitate payments between countries and continents, for example:
- P27 is a Nordic payment infrastructure for real-time payments across borders.
- The European Mobile Payment System Association is a collaboration between seven mobile payment solutions, Bancontact Payconing company, Bluecode, MobilePay, Sibs / MB way, Swish, Twint, and Vipps, to promote international payments.
3. Taking advantage of AI and Machine Learning to combat fraud
More and more players are starting to use AI and machine learning to identify and prevent real-time payment fraud, for example:
- Visa has developed an AI model that analyses each transaction by looking for attributes and patterns that indicate fraud.
- Nets uses AI to block fake transactions in real time by using models that analyse each transaction
4. Payments go from being visible to invisible
An increasing number of companies are working to offer consumers "invisible payments" with the aim of making it payments simple and easy, for example:
- Honda and Visa are working together to launch "In-car payments" for fuel, food and parking.
- Barclaycard has launched the concept "Dine and Dash" which means that diners can leave the restaurant without waiting for the bill. Instead the bill is paid automatically.
Historically, trends that have been linked to increased customer value have been the ones that have also had the greatest impact. We see this for example with Revolut who have been very successful. The same premise will apply in the future. For payments today, customer value is linked to a smooth, fast and secure process. It may be perceived as trivial, but it is more complicated than that, as consumers' expectations of what is smooth, fast and secure are constantly changing. In addition, it is at least as important to win the trust of customers. Without it, consumers will be reluctant to adopt new exciting solutions and technologies.
So for those who are following the payments market of the future – make your assessment based on what has the largest positive effect on customer value!
Are you interested in being inspired and discussing trends with both payment experts and exciting companies such as Citibank, ClearBank and Divido? In that case, welcome to our event, "Payment Outlook" the 12th March - Register here!
- EVENT POSTPONED due to the Corona virus.
Centigo's Payment Outlook, about payment megatrends and the future of payments. We will present our Payment Outlook report that describes how 10 megatrends impact the sector, followed by a panel debate with leading payments experts from the industry. There will also be time for networking, drinks and bites. Warm welcome!
When? Thursday 12th March, 6.30pm
Where? Centigo, WeWork, Kings Place, 90 York Way, London N1 9AG
Event contact details: henrik.p.lofgren@centigo.co.uk
- EVENT POSTPONED due to the Corona virus.
