Payments 2020 – A Wave of Creative Disruption


Patricia Partelow

Payments & Technology Innovation Leader

Where will payments be in 2020? Five years is not a long time, and migrations take awhile if you think about the number of stakeholders that need to be involved today.

In five years I don’t think any method of payments will go away, but the volume of checks will continue to diminish given they are not a good option for the consumer (re: identity) or the banks (high fraud risk). Reliance on cash (for the banked) will also continue to diminish but that trend has already started, given the introduction of contactless and a focus on micropayments. I also think companies will focus on finding convenient solutions for the unbanked that satisfy the regulators. That seems like a true tech play to me.

We are still reliant on POS infrastructure, so things will take time. I have always said that in order to be agile, we need to eliminate the reliance on physical POS. While this has not yet happened, I think the introduction of mPOS and putting more of the processing in the cloud or back at the issuer, creating more of a “dumb” terminal, helps. Who remembers client/server?

The question isn’t what payment form goes away (yet), but rather what other methods enter the market. The early disruptors were Paypal and Google. Now there is a plethora of tech startups trying to solve specific business needs. And the big, traditional players are creating innovation labs to disrupt their own business models and their current way of thinking. The amount of investment in Fin Tech is at an all-time high.

Timing is everything.

These new entrants and investment, coupled with advances in technology, create the perfect storm in this industry. Smart phone adoption, increased cellular speed and bandwidth, cloud computing, and tokenization provide the infrastructure needed to offer payment capabilities and value-added services when and where consumers choose to pay.

Build it and they will come, NOT!

Key to adoption of these new payment options, though, is to address an unmet need or enhance an experience. We all say that the key to future payment success is to make it a frictionless, enjoyable part of the shopping experience and — to be included– you have to add value. Advances in Big Data analytics will help in this area by providing the intelligence needed to present more personalized and relevant recommendations/offers, etc., which, in effect, establishes a Market of One. And as crypto-currency and smart- connected devices become more mainstream, the opportunity for providing a secure method for storing value and imbedding payments in the shopping journey will get easier.

Are we there yet? Are payment services significantly advanced from a mass market perspective? No. But are we on the way? Absolutely! Let’s check back in 2025.

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