There's a reason why “screw you, pay me” is a culturally significant saying. It communicates succinctly what we all know to be true: money talks, and few things matter more. So it's only natural to wonder what our money will look like not only tomorrow or a few months down the road, but in the not-so-distant future that lies years down the road.
These payments experts have kept an eye on the trends shaping payments this year, and they shared their opions on which trends are most likely to continue beyond this year.
Here's what they have to say:
1. Mike Massaro, CEO, Flywire
There has been lots of it in the last year and likely more to come. Big incumbents are looking to add new software capabilities to existing services to fend off competition and enter new markets. Others are adding
cross-border payment services to adapt to the increasingly global nature of their customers’ business. Consumer-facing businesses limited by distribution challenges are acquiring existing brands that provide instant access to new markets. As fintech investors assess which portfolio firms can make it to the next level and which can’t, some payments companies may have less control over their own destiny.”
2. Rasha Katabi, founder and CEO of Brim Financial
“The financial industry is playing catch-up. Banking and financial services started with technology that simply digitized the traditional transactions and processes. But now, the industry needs a mobile-first strategy that recognizes the expectations of the modern consumer. These firms must adjust to the modern consumer that only asks for in-person help when absolutely necessary, expecting an ever-increasing range of functions through mobile.”
3. Michael Diamond, GM & SVP of Digital Banking at Mitek
“I sense that the technical capabilities are racing ahead of cohesive value propositions (in the case of RTP) and – more importantly – users’ understanding of the risks associated with these services’ use.
-The RTP service will run into the greatest challenge in payment innovation: user inertia. The method of most companies to remit payment to their suppliers might be sophisticated or unsophisticated, but it works and there is little economic incentive to change.
-Some consumers know that Venmo is owned by PayPal, but this confuses the fact that the two systems have different intended uses and, as a result, different methods to dealing with fraud. A consumer might think – incorrectly – that the same protections associated with merchant fraud in the PayPal world extend to the Venmo world. In fact, Venmo is intended for “sure thing” transactions with people you know (split the check, pay your roommate for your share of the rent, etc), and when a user gets ripped off using Venmo for a merchant transaction they will get no relief from PayPal.”
4. Monica Eaton-Cardone, co-founder and COO of Chargebacks911
“The dominant trend seems to be an urge to speed-up and simplify processes. Speculation about blockchain and cryptocurrency has been on the rise lately, especially after Facebook revealed their plans to introduce their own coin, Libra. However, that’s still off in the distance.
We can see there have been significant moves to optimize practices in other areas that are already producing results. Take chargeback regulations, for example. The ongoing Mastercard Dispute Resolution initiative, combined with the recent introduction of Visa Dispute Resolution, aims to dramatically cut down on the average time spent on disputes.”
5. Joe Proto, CEO and Chairman at Transactis
“The buzz this year is speed. But the real goal is smarter payments and personalization. With consumer demand for faster and smarter, we’re seeing the development of more personalized paymentexperiences. Technologies that connect the different aspects of customers’ lives and help them make better financial decisions are on the rise.”
6. Kevin Lee, Trust and Safety Architect at Sift
“We’re seeing payments be shaped by a few trends – Buy now pay later, buy online pick up in store, and contactless checkout are top of mind. These are designed to make the shopping and buying experience more seamless and enjoyable for consumers, plus help retailers stay competitive.
Companies are deploying technologies that are better at analyzing fraud and default risks and provide insights into who is trustworthy. Because of this they can increase their revenues by allowing more good customers through, making the path to purchase easier for legitimate customers, while expanding into new areas with lower risk of loss.”
7. Lee Britton, Commercial Director at PFS
“NFC/BTLE/QR Codes/Bar codes have a bright future. The Telcos are ready to play and they can offer credit and banking/payment services for pre and post pay. Visa/MasterCard and other schemes already have tokenized wallets that could replace the ‘Pays' – banks have to bite the bullet regarding the Pays. Consumers want deals and incentives where to spend and we better listen to them.”
8. Maryanne Morrow, the founder & CEO of 9th Gear Technologies
“It appears that the big question is, will cryptocurrencies be seen as the most effective payment rails, or will there need to be purpose-built rails that are specifically designed for payments. While Ripple has been making inroads in the business, the JPM coin from JPMorgan is not only a direct
competitor but has the advantage of being run by the largest bank, with access to millions of accounts where payments need to be settled. And there are other startups that are working in the same space, which makes sense given the ~$2 trillion of revenues generated in the space.”
9. Yoav Dror, CEO of PumaPay
“Cryptocurrencies are increasingly gaining popularity. They are not the trend per se, but the recent surge in mainstream institutions and organizations researching, adopting and implementing payment solutions with
cryptocurrencies is the emerging trend for 2019.
The wider acceptance of cryptopayments by international firms cannot be neglected. Facebook unveiled its new cryptocurrency, Libra to be launched in 2020, something that will further boost usability and bring crypto payments in the realm of everyday life. From major organizations like Microsoft and Amazon to JP Morgan’s JPM Coin, the world’s biggest companies are bringing cryptocurrencies into mainstream finance, significantly shifting the existing paradigm. We are in touching distance of having cryptocurrencies used in everyday scenarios.”
10. Charlie Youakim, CEO of Sezzle
“The payments landscape is being shaped by Millennials and Gen Zers who demand freedom and choice, and many of payments tech companies are meeting that demand. The entire payments industry is entering an era of realignment in which new leaders will emerge to eventually compete – and ultimately overtake – the incumbent payment players, whose underlying business model has changed very little in the past three decades.”
11. Sanja Kon, VP, Global Partnerships at UTRUST
“Banks and Fintech companies are working in close collaboration:
While previously competitors, bank, and fintech partnerships are becoming increasingly common and growing to better serve their customers.
Banks have realized that their legacy infrastructures are holding them back from innovating at an acceptable speed.
Fintechs, on the other hand, are looking toward offering their services to more established and built-in customer bases, as opposed to attempting to reach the same customers on their own.
Buy now Pay later:
A few payment companies, led by Swedish company Klarna, are focusing on the rising portion of customers, mostly millennials, who refuse to make a purchase without a “try before you buy” online proposition.
This removes one of the biggest, inherent obstacles to online shopping and allows customers to delay their payments.
Merchants are now, more than ever, facing the need to serve their customers differently by taking into consideration a holistic experience across online stores, physical stores, and apps. The payment experience plays a key role in this scenario: payment providers need to remove complexity from omnichannel payments and focus on convenience and security.
Adoption of Blockchain technology:
Financial institutions and major tech companies are all looking towards the adoption of blockchain technology – especially when it comes to payment processing, international remittances and trading.”
12. Andres Ricaurte, Senior Vice President and Global Head of Payments at Mphasis
“Every aspect of the payments landscape, from the user experience to the underlying rails, is being challenged. Technology players like Facebook and Apple have begun to develop their own payment products. Fintechs that were once considered start-ups have grown to be larger than many established players. Digital banks have gained strong momentum in Europe and increasingly in Asia, propelled by advances in open banking regulation. These dynamics are driving incumbents to re-think and accelerate their payments agendas. Banks are investing heavily in overhauling their payments platforms, while infrastructure providers and processors like Fiserv, First Data, TSYS and Global Payments are turning to M&A activity in order to generate cost efficiencies and investment capacity.”
13. Bill Wardwell, VP Strategy and Business Development, Bottomline Technologies
“Three key trends are shaping payments:
1. The proliferation of payment schemes is giving businesses more options to make payments to anyone, anywhere in a much more efficient way.
2. The openness of all parties in the payment ecosystem to collaborate on creating a better payment experience will continue to accelerate.
3. Businesses' focus on security will require banks and fintechs to focus more than ever on not only enabling payment activity, but securing payments and associated data.”
14. Eric Brown, Founder and CEO of Aliant Payments
“The biggest trend that’s shaping payments this year is all the major players that are getting involved in cryptocurrency. While traditional financial institutions and large corporations have been slow to embrace cryptocurrency, many are now licensing blockchain technology, patenting their own bespoke blockchain technologies and adapting the array of benefits that blockchain and cryptocurrencies have to offer.
Merchants of all sizes and industries have begun accepting cryptocurrency payments, and the technology has come a long way in a short amount of time. Not only are e-commerce merchants accepting crypto payments, but retail merchants as well through the use of QR codes.”
15. Jared Weitz, founder and CEO of United Capital Source
“Customer experience and ease of use have made a rapid impact on the way every aspect of business operates. Payment methods are no exception. The use of mobile phones has shaped the way in which transactions are completed. With every consumer now having constant access to their phone it has enabled the use of in-store mobile payments. The use of a tangible credit card will begin to reduce as mobile card payments rise.”
16. Kyle Collier, founder of Phaze
“Stable coins. Multiple banks are planning to launch stable coins and Facebook/lLbra will soon launch their own coin. These coins have a better opportunity to be used like currency since they are backed by real-assets and thus are not volatile.”
17. Russ Chacon, Vice President, General Manager at Inlet
“Bank bill payment is evolving to embracereal-time capabilities that will provide consumers with a superior experience, enablingthem the option to receive immediate credit when payments are submitted. This fundamental change solves a major flawthat has always existed in bank bill pay. Historically billers have not had awareness of when a consumer makes payments at their bank until sometimes days later. As a result, consumers haven’t been able toanswer the most critical question about their payment. “Has my payment been received?” Real-time payments have the potential to revitalize the bill payment experience at banks, increasing usage, and consumer satisfaction.”
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