By
Christopher Hamman
May 22nd, 2020
The global payments industry is facing a number of trends like growing mobile usage and higher customer expectations that will continue shaping the future of payment processing.
The current technological developments are significantly changing the way merchants interact with consumers. The volume of mobile payments has tremenduously increased as people are looking to manage multiple aspects of their life with a smartphone.
In 2016, we observed an exponentıal growth of mobile payments sector, which is expected to continue growing in 2017, given the rising customer awareness and more mature products being developed.
According to Cisco, there will be 5.5 billion global mobile users by 2020, up from 4.8 billion in 2015. It is anticipated that half of today’s smartphone owners will use their devices for online transactions.
With the ongoing technological advancements, customer expectations are changing. The ease of paying with a smartphone is no longer the main reason of adoption, with users expecting to be able to conduct contactless payments. Tech startups are working on providing consumers with a frictionless in-store experience.
Amazon has recently presented Amazon Go, an option allowing users make purchases without using their mobile devices. The buyers will be able to pick up the item they want and it will be automatically added to a virtual cart. The service is still in beta but is scheduled to be launched in early 2017.
Apart from Amazon Go, we are likely to see a multitude of other projects that aim to simplify the process of in-store payments. Such companies as Euclid, Nomi, and RetailNext are joining the trend and working on moving all stages of the payments process into the background.
In 2017, we are likely to see more mobile payment offerings coming from China, which is the world’s largest mobile payments market. In 2015, the country processed over $235 billion in transaction volume, The Wall Street Journey reports.
Despite an isolated nature of the payments industry in China, local mobile payment providers are considering expansion to other countries. AliPay has recently unveiled its plans to launch its platform in Australia and Europe. The company is one of the leading mobile wallet providers, with more than 90% of mobile wallet users saying they had used Alipay.
Other domestic mobile payment systems like Baidu Wallet and WeChat Pay are also planning to bring their services overseas. Although the platforms are now targeted at Chinese travelers abroad, they are apparently planning to develop global payment solutions.
This year, on-demand apps will continue to facilitate the sharing economy. It has never been easier to catch a taxi or order a take-out with new payment processing instruments. The on-demand approach will have an impact on the retail industry as well, as consumers are no longer content with waiting days for their purchases to be delivered.
Meantime, the use of near-field-communication (NFC) will continue rising this year. The technology enables people to make instant payments by holding a smartphone to a contactless payment terminal. Besides, payment provider will find new ways to offer value to their customers by creating loyalty cards, online gifts, discounts and coupons.
Moving into 2017, merchants should not ignore the influence of the current trends in order to stay relevant and meet new level of customer demand.
