As mobile and online payments continue to grow as an innovative sector of the tech market- what marketing changes or new innovations are we going to see in 2014? Here are five predictions for the year ahead.
1. Payments will become invisible. Check-In rather than Check-out.
We have been introduced to the concept of ‘Checking in’ through the augmented world of mobile Apps. If your customers are checking in with Facebook, Google+ or Foursquare then why not allow for this to also be your payment login system? Payments can be integrated into the check-in as a one-time authentication process so purchases are one tap away and tied into user accounts. Let’s make 2014 the year we kill the checkout system.
2. Card payments will become more secure.
The US payment industry is a little bit behind when it comes to card security. Most countries have been using chip-based cards for a number of years now. I make an effort to always stop clerks and cab drivers from swiping my card as inserting the chip provides multiple levels of encryption. The US will start rolling chip based cards as the market demands it after recent instances such as the Target hack. Mobile wallets also provide increased security as the card details are tokenised with a highly secure incepted key. Furthermore, tokenised cards provide a level of transparency- particularly with real time payment platforms that provide live data on the card's use.
3. We’ll see the introduction of new alternative currencies
BitCoin saw its highest growth in 2013 with many using, accepting or investing in the open source currency. There are a number of other alternative currencies that are also making a splash and more importantly making us think about payments in new ways. I predict an increased number of niche currencies that will be developed for specific market requirements. This might include one currency to buy and sell concert tickets and another to buy and sell real estate. Below- Kanye West inspired currency.
4. The core payment switching technology will be (and needs to be) disrupted.
Customer facing payment technology is in a period of growth due to innovation and disruption- particularly with mobile and online payments. But what about payment switching- the necessary backend system that all payment solutions depend on? There hasn’t been much change here and it’s easy to understand why. Switching technology is not very sexy- you have to be a certain breed of developer to get excited about back-end data systems. Core payment switching is also subject to old standards issued by the industry and government departments that would be very hard to conform to with new technology. However, the industry has pushed the mainframe based technology to it’s limits and change is required. We’ll start to see secure cloud-based payment data switching be introduced within large organisations and behind banking systems that will allow for faster switching and increased volume. In Australia, The Federal Reserve Bank has a sub-committee assessing the requirements of real-time switching across all banking infrastructure. The companies that provide these new switching solutions will be in a high growth area of payments.
5. We’ll do less banking.
With peer-to-peer mobile payments, alternative currencies and flexible access to your own money through mobile and web technology there is less of a need to go to the bank. In fact, countries with little to no banking infrastructure have the fastest growing payment market (Brazil, Mexico, India) . Of course banks will always have their place- but payments are breaking away from the banks and moving into the tech space and gaining speed by doing so.
What are your predictions for payments in 2014? Let me know on twitter @quaypay or #payments2014
Jon McFarlane, @jonathanaca
Cameron demonstrates how easy it is to select or change your payment options to either:
- An in-line Credit Card form, or
- A digital wallet with social media (and QuayPay) login.
"Gamification is the integration of game mechanics or game dynamics into a website, service, community, campaign, or application"- Wikipedia QuayPay can take this further and enable gamification as part of the payment experience. This provides incentive for engagement and grows sales and website views at the same time.
- Reward engagement with points. "Share on facebook to win 10 points"
- Accept these points with QuayPay. "Use your points to save 10% on this item"
- Control the value of these points from the QuayPay dashboard.
Check out the video below to find out more.
- 22 billion transactions processed in 2010, growing to 33 billion in 2013 and over 50 billion by 2015 (that will be nearly 1,600 transactions per second, every second of the year)
- The value of transactions processed was a total of $1.1 trillion in 2010 and expected to increase by 50% to $1.6 trillion in 2013 and edging on $2.5 trillion by 2015 (and that will be around $80,000 worth of transactions per second)
Naturally these numbers are driven by the juggernaut of the online retail market. Across the developed world online shopping is growing at around 20% annually, and this is the case in Australia, US and the UK. In developing countries the growth rate is substantially higher, like tenfold increase over three years in China as an example.
These conditions have seeded the birth and success, in some cases spectacular, of the payment system providers, which in turn made a lot of entrepreneurs and investors very happy indeed.
PayPal is the poster child of this industry, posting growth in the number of transactions processed of close to 200% a year, but there are many more. As it is to be expected in an industry in its infancy the M&A activity has been feverish with some impressive transactions on very generous valuations.
Possibly the largest such deal was the sale by the RBS of WorldPay to Bain Capital Partners for £2.03 billion. Other examples are the acquisition of Bill Me Later by eBay for $945 million, the acquisition of Revolution Card by Amex for $300 million and the acquisition of Ogone by Ingenico for €360 million. An Australian start up has shared the spoils: Envoy was acquired by WorldPay for $106 million just five years after launching with an initial investment of $1.1 million.