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