Payment technology has come a long way. When credit cards were introduced they were a revolutionary idea that challenged cash. Since then, payments have grown a lot, and not only are there new ways to buy, but exciting business opportunities bred out of these technologies. I’ve noticed a few 2015 trends that are taking hold in the payments industry:
1. A security boon
New technology brings new risks. While this idea isn’t fresh, the emphasis on security in the banking and payments industry has certainly ramped up as of late. If you remember, there were a number of notable data breaches over the last few years, headlined by Target and Home Depot. Consumers clamored for safer tech and systems, and companies were all too eager to provide it. One of the key problems isn’t with the payment methods themselves, but with the systems and processes in place. The Target breach was due to poor third-party management, and most hacks are the result of human error. Thankfully, smarter, safer business processes – especially when it comes to payments – is a major trend in 2015.
2. Payments create business value
At one point in time, payments were a simple exchange. Goods for cash, for example, and then the transactional relationship ended. That doesn’t have to be the case anymore with the availability of value-adds in payment tech. One example is the ability to share data via payments. The first sign of this was giving an email address at purchase. Now, consumers and companies share data seamlessly through customized payment software. The user swipes their card, and the business now has their account information, payment history and email address. Then, they have a cost-effective way to reach out to the consumer after the fact through a quick email. For consumers, they could soon see more coupons, egift cards and other rewards appear in their inboxes.
3. The mobile (and wearable) explosion
The Apple Watch, like most devices launched by the company, ushered in a new era of payments. In simple terms, the Apple Watch is a smartphone on your wrist. One of its key functions is Apple Pay, which is a mobile payment application created by the company. It replaces credit and debit cards, so users can use their watches at the point of sale. While Apple wasn’t the first to create a smart watch, they have the largest audience, and that means we could all soon start to see wearable tech – and more mobile payments – sweeping the country. In fact, wearable or mobile payments are one of the biggest trends this year. At one point, consumers were worried about mobile security. Today, that is barely a concern, and as a result, many businesses are making wearable and mobile payments a reality. According to Cisco Systems, the estimate for the number of wearable devices globally is at 578 million by 2019. This rapid expansion makes wearable tech a hot market in the payments industry.
4. Consumers have options
This leads me to our next trend: options. The variety in payment options has nearly grown exponentially over the years, going from cash only to cash and plastic, up to today where we’re incorporating in more technological innovations like mobile devices (smart watches and smartphones) and digital wallets. Today, one of the key trends in the payments industry is the number of compensation choices for consumers. The best part is the adoption rate on behalf of businesses. Mobile payments aren’t so scary anymore, and updated point-of-sale systems are secure, flexible and efficient. The trend today is “pay as you want,” with consumers being able to choose between the various options at their disposal. Even crypto-currencies are having their moment, with the rise of bitcoin and other alternative payment methods. These four trends all have one thing in common: potential – potential for more growth in the industry and more options for businesses and consumers, from how to pay to how to reward. The future of the payments industry is bright.