Evolving technology and the expectations of the fast-paced, digitally-driven generation are unsurprisingly shaping the world of payments. We've taken a look at the key trends to be aware of in this space over the next 12 months.
The move to cashless
According to a recent report by CNBC, fewer people are using cash, with three out of ten Americans saying that they use absolutely no cash in a typical week. Credit and debit cards have become integral to modern-day living for many, due in part to the introduction of contactless payments. Another reason for the move away from paper is the rise of mobile transactions. Thanks to open banking and the increase in availability of payment apps - such as Atom, a new breed of digital banks that offers an app with a display that changes colour depending on the health of your finances - mobile payments have skyrocketed and are set to continue growing over the next 12 months as consumers demand a seamless and speedy way to make payments.
As the banking market becomes increasingly more competitive, consumers are developing a stronger awareness of their options. For many consumers, premium rewards can be the deciding factor between card providers and are even seen as an element worth switching for. For this reason, rewards schemes and initiatives are likely crop up even more this year within the payment realm. Such incentives can range from loyalty points or money-off vouchers and cashback to airport lounge access - the best schemes tend to focus on accentuating the lifestyle of their customers.
Transparency: from start to finish
From data to payments, consumers are more engaged than ever in transparency and they aren't the only ones. The recent investigation by the EU Commission into transparency for cardholders sought to identify ways to give consumers greater clarity when making payments abroad. Ultimately, consumers should be well-informed on the choices available to them when making a payment, so they can complete the transaction in the way that's best suited to them. Transparency will be a focus for the whole payments industry this year as consumer expectation for greater clarity continues to grow and the impact of the PSD2 regulation implemented last year is measured.
Stepping up on anti-fraud
Consumers are continually increasing their knowledge of the data landscape, leading to a stronger awareness of breaches and security risks. Higher instances of data breaches have meant that payment service providers are now ranking cybersecurity as a top priority. Advancements in digital security are matched quickly by progressions in cybercrime initiatives. There is likely to be a push for new technology that out-innovates fraudsters over the next 12 months, bringing more peace of mind for both consumers and merchants alike.
This coming year will likely see a number of prominent trends in the payments sector, many of which will bring strength of security to existing systems and transparency for customers. The ever-changing habits of consumers will likely continue to prompt payments services to re-evaluate to remain relevant to the market.