A couple of weeks ago, I shared my thoughts on the primary takeaways from last year in the emerging payments space. Looking ahead into 2016, here are a few topics you may want to keep an eye on, too
- Not to disappoint, but the payment trends in 2016 are the same big trends we have been tracking for the past 3 years – digital, mobile first, social media and the automated integration of all of these things. These are the same things that have been building steam and changes in these areas are not happening overnight, as we all know. The regulatory environment, the vast existing payments infrastructure, consumer habits and the sheer number of players in the market, all set a multi-year pace for all of the important and complex trends we track.
- In 2016 I am hoping to see an increased focus on the consumer. Over the past couple of years, I have noticed a lot of solutions looking for problems, gratuitous technology enhancements and solutions designed to earn more for payments service providers. Frankly, many of the new products and enhancements fighting for traction in the market simply don’t do enough to make life easier or better for consumers. From the consumer standpoint, making a payment is not the goal – the goal is receiving goods or services. I found it very interesting to learn there was a mobile payment app that exists solely to tell me where I can use ApplePay. That’s great for a payments geek like me, but it’s completely backward for the average consumer looking to make a purchase. Anything that causes more friction at the POS than whipping out and swiping a card is something that will either not be adopted or will have to be forced on consumers (hello Chip and PIN – how’s that working for ya?!). The most ubiquitous payment medium on the planet is still a mag stripe card. In many cases, the industry has been giving consumers bad payments experiences as we attempt to move to the next stage of our evolution (digital and mobile first). I hope we start to see the end of that aggravation in 2016.
- Next let’s talk about a payment trend that won’t be ending in 2016—banks. If you’ve followed my posts, you know that I am a Bitcoin and blockchain enthusiast. That said, I know that at the end of the day the average consumer in a stable first-world economy is still going to use a regulated bank to act as a trusted depository institution. Banks are regulated for a reason. There will always be a place for them. For some, it might be fun to predict the downfall of the traditional bank. I would even concede that the role of the retail bank is going to change over the next 3 to 5 years. Banks will adapt to the emerging financial and payments eco-system – and to a large extent will work with regulators to shape it, cryptocurrencies and distributed ledgers notwithstanding. In fact, watch closely as these technical and process innovations are co-opted and hijacked by existing players in the payments space. This will not be a revolution; it will be an evolution.
What are your predictions? What payment trends will you keep an eye on?
Next week, Payments Leader will weigh in with his thoughts about what’s ahead for retailers and merchants in the coming year.