As 2018 comes to a close, business experts are turning their attention to the trends we can expect in the coming year. The payment processing industry is no different. As a matter of fact, several trends are starting to take shape in that industry. These trends will undoubtedly change the way businesses take customer payments for years to come. As you begin making your own plans for the last year of this decade, keep an eye on these big trends.
1. Increased Adoption of Mobile Payments
The idea of mobile payments isn’t necessarily new. However, it hasn’t always been popular. Nonetheless, after a few years of consumers being slow to adopt the technology, it’s beginning to catch on. In fact, researchers predict that by 2020 more consumers will use mobile payments than credit cards in stores. This will take mobile payment revenues from around $75 billion to more than $500 billion.
Experts attribute much of this growth to the fact that mobile payments appeal to younger shoppers. Moreover, both Generation X and millennials are expected to overtake baby boomers in terms of population in the next few years. Therefore, businesses that wish to remain competitive will need to embrace mobile payments.
RELATED ARTICLE: HOW TO IMPROVE CUSTOMER PAYMENT SO YOUR BUSINESS CAN THRIVE
2. Mobile Wallets Become More Popular
With more people willing to use mobile payments, it only makes sense that mobile wallets are also becoming more popular. Services like Apple Pay, Android Pay, Google Wallet and Samsung Pay make it easy for customers to make payments without taking out their wallets.
It’s not just convenience, however. That’s because mobile wallet payments are actually more secure. This is mostly because the payment information is encrypted. Moreover, consumers must provide authentication to make the payment.
Again, businesses wanting to remain competitive in 2019 need to consider using mobile wallet technology.
3. Increased Emphasis on Customer Experience
As more people switch to using mobile payments, the emphasis on user experience is also increasing. Consumers expect a seamless, simple, and efficient experience, without any complications. This means that payment processors need to be more focused than ever before on user experience in 2019. In other words, they need to make the payment process not only simple and intuitive but even enjoyable for customers.
Keep in mind that most younger consumers don’t see mobile payments, online digital payments, and other alternative forms of payments as replacements for existing methods. Instead, they view them as enhancements and improvements on the way that things used to be done. Therefore, your focus in credit card processing needs to be on improving the customer experience. You want to give your customers an experience that will make them want to continue using these forms of payment and feel satisfied and secure doing so.
4. The Use of AI for Fraud Detection
Criminals are becoming more sophisticated all the time. This means that payment processors need to also increase their efforts to fight fraud. One of the increasingly common tactics is the use of artificial intelligence to detect fraudulent transactions and protect consumers.
According to one survey, 61 percent of financial services companies are either already using AI or plan to adopt AI technology by mid-2019. These companies will use AI for data analysis and for identifying potentially fraudulent activity. Using AI to spot unusual activity, suspicious transactions, or odd customer behavior is quickly becoming the industry standard. Therefore, payment processors should develop plans to implement these protections if they haven’t already.
5. Increased Adoption of Biometrics
Finally, AI-based fraud detection is not the only means of increasing security in payment processing. Expect to see more adoption of biometric authentication for making payments next year. This will include the use of fingerprint technology and facial recognition. Several mobile wallets already offer biometric authentication of purchases. However, expect to see increased demand for payment processing equipment that is also equipped with the technology for use with in-store purchases. Biometric authentication is both more reliable and more cost-effective than passcode-based authentication. Moreover, it reduces loss to both customers and businesses. Therefore, it’s likely to start building more steam as a security measure in 2019.
Some Final Words About Payment Processing Trends
These certainly aren’t the only trends that will be taking hold in the payment processing industry in the coming year. However, they are bound to be the most disruptive. As technology improves and more people become comfortable with different forms of payment, the entire payment processing landscape is likely to look very different 12 months from now.