The Evolving World of Payments
Consumers are evolving their habits at a pace that is challenging multi-national FMCG companies. This is no different for the financial companies that are helping facilitate this evolution by providing ever increasingly sophisticated was to transact. Following discussions with some of the biggest names in the payment services industry, I’d like to look at a few key trends that are fast picking up pace.
In the moment
In mature markets, younger generations of consumers are increasingly taking loans at the Point of Sale (POS) as opposed to simply using their credit cards to pay off purchases. Add to this the boom of ecommerce and you now have a growing number of start-ups that are catering to this crowd of instalment hungry millennials.
Startups like Klarna or Vize (recently acquired by Mastercard) are enabling a new way to shop where you order, receive, choose, only get billed for what you keep and decide if you prefer monthly repayments.
The internet of things (IoT) has entered into our homes at a surprisingly fast rate. Now the next step is to understand how to facilitate choice of products “Alexa, buy some ketchup, which one?” within the interface and how payments are made. A potentially big space that is still being studied it seems.
The continuous increase in urban population puts growing pressure on public transport to move people around in an effortless way and this includes facilitating the means of payment. More and more cities are being converted to the concept of Smart Cities, but what is the next step? Teams of people within the major payments companies are looking to answer What next? Where next? realms of payments and who knows, maybe soon your car will be paying parking without you even noticing?
There’s no better example to illustrate “outsiders” entering this space than looking to the ecommerce giant Alibaba with AliPay, or the instigator of all-in-one or SuperApp WeChat who entered the space through WePay. How can existing payments companies such as Visa, Mastercard or American Express interact with ecosystems that are trying to replace them?
Evolving is key in this industry and plastic cards have been around for quite some time already. What’s next? This is where forgoing cards and securing transactions in the digital space is key. New tech such as tokenisation as quickly ramping up and taking over this space and soon we might have more example of digital first cards like the Apple Card pop up and become mainstream.