Five Trends Impacting the Payment Industry
The evolution of technology is likely to encourage significant changes in consumer behavior over the next decade. As their habits change, consumers are going to expect simple and convenient payment experiences that fit seamlessly into the digital environments they engage with the most.
1. Wearable Technology
Gadgets like Apple’s iWatch, fitness trackers and “smart” accessories are becoming more popular among consumers. Many of these devices are equipped with near-field communication (NFC) technology that enables payments with compatible payment terminals. Business travelers, fitness enthusiasts and millennials are just a few key demographics who are most likely to adopt wearable technology that allows them to make quick purchases and pay bills while on the go.
2. Mobile Payments
The transition to EMV chip cards in the United States brought a resurgence of activity in the mobile payments industry. More consumers are utilizing mobile payment platforms such as Apple Pay as merchants upgrade to NFC-friendly payment terminals and acceptance increases. Big-name retailers like Target are also entering the mobile payments game by offering consumers their own rewards-based mobile payments platforms.
3. The Internet of Things
According to HIS
, the Internet of Things market is expected to grow to 30.7 billion devices by 2020 and over 75 billion devices in 2025. Payments are going to play an integral role as businesses explore innovative ways to offer their products and services through connected devices like home appliances, smart cars and virtual assistants.
4. Faster Payments
Modern consumers live fast-paced lifestyles and expect instant results. They value speed just as much as convenience and flexibility in the payments process. Slow payment processing is likely to frustrate consumers as new technologies shape expectations for fast service. With the rollout of Same Day Automated Clearing House (ACH) in the United States, the push towards fast or even real-time payments is gaining momentum.
5. Virtual and Augmented Reality
The huge success of Pokemon Go in 2016 proved that the augmented and virtual reality markets are incredibly lucrative. May of the biggest names in technology are already manufacturing and marketing their own virtual reality headsets and “smart glasses”. These new digital environments will allow for much more intuitive, immersive shopping experiences; the consumer will expect the payments process to be just as seamless.