January always brings the promise of new beginnings and new ideas; a chance to reflect on the past to plan for the future. At SafeCharge, that’s exactly what we’ve done. While we do not have mystical powers or a crystal ball to predict what will happen in 2019, we have looked at the developments in the payments landscape in 2018 and collated the top nine trends that will become increasingly important in the coming 12 months.
The 9 Trends of 2019:
Gearing up for customer authentication
Last year new regulations like PSD2 brought customer authentication and the importance of digital identity verification to the limelight. In 2019, being able to verify a digital identity is a must as more businesses move online. For some industries in particular – such as gaming and forex – the ability to have efficient and smooth authentication measures to protect both customers and merchants is key. A new crop of products is seen in the market to automate customer authentication online, supporting both, great customer experience and secure transactions.
The growing importance of local payment preferences
As the marketplace becomes global, understanding the way in which people want to pay in their own country and across borders is crucial. The popular way to pay in the UK is different than how people want to pay in Thailand or in Canada for example. To capitalise on a global customer potential, businesses need to offer specific local and cross border payment methods. A strong international commercial strategy is powerless without a strong global payment strategy.
Omnichannel experience rules!
The ability to buy anything, anywhere, using any method is becoming a norm. Consumers today expect to be able to browse for a bag online using their smartphone and then complete that transaction while on their iPad later that day. From checkout out at a store to apps, and even buying through links on social media, the options to pay are growing, and businesses will need to make sure they can keep up with their shoppers fast evolving shopping habits.
The rise of the cashless generation
Generation Z will soon be entering the workforce and have real buying power. Businesses wanting to capitalise on this tech-savvy generation have to pay attention to this generation’s needs and expectation. The new generation shoppers will bring with them the trend of going cashless, and both, financial institutions and merchants need to have the infrastructure and technology in place to support this trend.
Here and now: real-time payments
With society continuing to crave instant results, real-time or instant payments are on the rise. Real-time payments guarantee immediate availability of funds to the receiver of the transactions, as opposed to real-time authorisation of a transaction where the buyer is committed to paying and the recipient is guaranteed to eventually receive the funds, but neither is immediate. Financial institutions need to be fully aware and prepared for this new payments environment.
Move towards open payments
Over the years customers have gained more and more control over their data, banking, and finance. This trend will become even more prevalent in the coming year as open banking will bring a big change in payments, affecting how payment institutions innovate. With the likes of large businesses such as Amazon, Whatsapp or Google having the potential to enter the payments management market, it casts the traditional banks to the sidelines. Consumers will benefit from open payments but online giant organisations and retailers are also keen to benefit from it. For example, with open banking, these businesses could potentially read into the shopping behaviour of customers through their payments data and create innovative loyalty programs to incentivise customers.
Flexibility in partnerships
A tricky balance for most businesses to master is to have complete control and management of all parts of their business (payment gateways, acquiring, issuing, risk assessment etc.) while also not being tied down to one single provider. Businesses will be looking for a strong infrastructure with a steady technical backbone that will also give them the flexibility to work with several vendors and suppliers to suit their specific needs. One size fits all does not fit today’s businesses.
The year of PSD2 and 3D Secure 2.0
While 2018 might have been the year of the GDPR, in 2019, PSD2 will seriously impact businesses. From identity management to two-factor authentication, businesses have a lot to prepare.
To support strong customer authentication brought on by PSD2, 3D Secure 2.0 will play an important role in improving security and increasing smooth authorisation of card transactions. With growing preference for payments via mobile, 3D Secure 2.0 will take centre stage in 2019 and provide ease and speed of ‘old school’ transactions with the previous 3D Secure standard. It offers multi-factor authentication, which once set-up, make transactions simple and straightforward for customers.
ML and AI in payments
Machine Learning and Artificial Intelligence is seeping into every aspect of our everyday lives. From our Amazon Alexa’s to the curated playlists on Spotify and of course smart home devices, ML and AI are becoming integrated into everyday life. With the banking and finance industry already heavily relying on AI for things like customer service, fraud protection, and investment, and of course now more and more in payments.
Throughout the year, we will go through each of the above trends in dedicated blog posts which will delve into the topics and discuss how they affect both consumers and businesses as well as how SafeCharge is providing effective solutions to stay ahead of the trends.
Talk to us to know more about payments!