It has become a tradition for Payvision to share our predictions for the year ahead; you may find last year’s ones here. The payments industry has converted into a very exciting place to be due to the rapid pace of innovation and technological progress. The booming cross-border ecommerce market has pushed all the players, from merchants to PSPs and other service providers, to rethink their organization and adapt to new customer and market demands. Explosive use of mcommerce has led to a more connected consumer with an expectation for omnichannel experiences. So what is next on the agenda for the payments industry?
Looking at the high number of IPOs announced last year from companies such as Paypal, Worldpay, First Data and Square compared to the years before, we can easily observe the steady market consolidation trend and the high amount of trust for further investments. Raising debt and equity is a faster and better way to grow in such an exciting market.
This trend will continue, and for most of the companies, 2016 will be the year of integration. From a Payvision perspective, we are well positioned because we have done a big chunk of business and solution integration in 2015, and we are now focusing on innovation and new business growth, knowing what are the next-level tools needed in this industry.
By launching Acapture and partnering with PayPlaza, Payvision added an innovative and flexible alternative payments and POS/ mPOS solution to its global payment processing offering, allowing partnering merchants to deploy a unified processing system with omnichannel functionality.
From a regulatory perspective, I mentioned PSD2 and data privacy (Safe Harbour) as two of the key legislative aspects that will continue to affect the payments industry in the near future.
PSD2 will be further developed and localized, so the main effects will be sensed starting in 2018.
If we connect the PSD2 with the omnichannel experience – the buzzword of the past three to four years, the PSD2 both facilitates and challenges the concept of omnichannel retail. On one hand, it gives recognition to disruptive, non-traditional payment services, allowing scope for more innovative solutions without bulky legacy systems. The PSD2 also contains a significant strengthening of rules on payment service user authentication, with the purpose of ensuring that payment service providers can be confident on the identity of those using their services. PSPs will be required to apply ‘strong customer authentication’ – two or more independent methods – when payers initiate an online payment or electronic transaction. This is known as two-factor authentication.
Data privacy will be one of the main topics discussed in 2016 due to the grey area around the International Safe Harbor Privacy Principles and the transfer of personal data between the U.S. and Europe.
Mobile moving toward IoT
The Internet of Things is a concept in which everyday objects, more than just smartphones and tablets, are each connected to the Internet, and thus to each other. This sophistication allows for an entire ecosystem of digital intelligence, communication, and ecommerce. It enables the collection of quantifiable data, aiming to make everyday life smooth and more enhanced; the ultimate omnichannel experience.
A ‘mobile device’ will no longer only refer to just a phone or tablet. It can refer to any number of objects; watch, a toothbrush, shoes or a pair of glasses. In turn, mobile payments are evolving as a branch of the Internet of Things ecosystem.
It is estimated that the number of devices connected to the Internet will explode from 10 billion today to 50 billion by 2020. The Internet of Things will not only benefit the consumer, it will bring huge gains to the payment service companies. With increasing connectivity and Internet-enabled devices, there will be more endpoints at which a consumer or business can make a purchase. The mobile payment becomes so seamless in the chain, the payment part almost disappears. In fact, making payments disappear may be the key to the mobile payment adoption tipping point, rather than creating beautiful interfaces or applications. As with the entire Internet of Things ecosystem, the value is driven by what we don’t see than what we do.
The hot topic for 2016 is omnichannelling – creating smooth, multi touch point experiences for mobile consumers, enabling offline and online to unite across desktop, mobile and in-store.
Even though channels like mcommerce and mPOS are growing fast, 94% of total commerce is still point of sale, so we can’t ignore it in the total solution that we offer, and ecommerce standards will be applied to POS. Learn more about it in our most recent report http://www.payvision.com/profitable-omnichannel-retail
Instead of striving to achieve seamlessness on countless channels, merchants should force themselves to think like their consumers and make the emotional changes across meaningful channels, not just for the bottom line. Therefore, merchants should identify and understand customers’ behavior and preferences in order to offer them the shopping experience they wish for. This kind of data-driven approach leads to higher conversion rates, while enabling merchants to truly understand their own market performance.
Payvision, for instance, has a unique position, together with Acapture and PayPlaza, thanks to our full 360 degrees omnichannel package, which allows them to implement a totally integrated, end-to-end platform for all their payment processing and reporting. Let us know if you are interested in finding out more about our product offering.