While 2020 may not bring flying cars or the long sought after hover-board for the masses, there are some exciting innovations that will be making waves in the payment space.
Paving the way is a whole generation of tech-savvy consumers across the Asia-Pacific region who are not only comfortable using technology to manage their payment needs, they’re demanding it. They are the driving force behind the growing need for new ways of enabling transactions.
Here are the top three trends that will disrupt the payments space from 2020 onwards.
Greater uptake of wearable technology
You see them everywhere, smart-watches of every shape and style, all with the capability of transacting payments. Not only is this technology effortless, but it also integrates perfectly into the digital lifestyle.
Wearable technology all began with the smartwatch, which uses near-field communication (NFC) to activate payments. When two devices with NFC capabilities are within 4 cm of each other, communication can be enabled. A quick tap and a secure payment can be easily made with none of the fumbling for wallets and card details.
While smartwatches are already available on the market, you can expect to see a wider adoption of this type of payment technology in 2020. With more and more brands branching out into the wearable technology market, there will be two major advantages for consumers, lower price points and more models to choose from!
With NFC technology becoming easier and more affordable to integrate with devices, manufacturers are looking to expand wearable technology into different kinds of devices. Australia’s Bankwest released the Halo in 2018, a ring that allows wearers to tap on a terminal to make a payment. Other banks have launched similar products, including bracelets and keyrings. Many of the new wearable devices never need to be recharged, giving them an edge over smartwatches and smartphones.
The market for wearable payment devices is expected to experience strong growth over the next three years, with estimates predicting the industry will be worth $27 billion by 2022. Given the huge surge in popularity smartwatches have already enjoyed, it’s not hard to see consumers are loving the seamless experience that wearable payment devices provide.
An ever-increasing appetite for mCommerce
You might be familiar with the term eCommerce, now meet its younger cooler brother, mCommerce. mCommerce refers to all aspects of making a purchase through a mobile device, including mobile-optimised websites and apps.
Sales made on mobile devices are swiftly overtaking desktop e-commerce sales. A report from Visa shows that mCommerce sales are growing 53% faster than those of desktop e-commerce.
Not to mention, mCommerce sales are estimated to make up 54% of the total eCommerce sales in 2021, which makes 2020 the year to get your business mobile ready. With so many consumers preferring the ease and accessibility of mCommerce, it’s time to get onboard.
The rise of Artificial Intelligence (AI)
The words Artificial Intelligence bring to mind robots and flying machines in some distant future, but the reality of AI is, it’s just next door, and it’s streamlining the way we deal with a lot of different areas in the payments world.
AI is already being used for its analytical capabilities to study the behaviour of account holders and customising interactions to their specific needs. The experts are predicting that it will become even more widely used by payments technology companies during the next decade.
AI has the potential to completely revolutionise the payments arena in a few exciting different ways:
While fighting fraud is complex in the eCommerce space, AI could be instrumental in securing eCommerce transactions. Machine learning algorithms can be used to analyse huge volumes of data in innovative ways to detect unusual and fraudulent activities.
Expect to see more human-like chatbots, powered by AI, to provide personalised customer service. Payment companies and financial institutions could benefit by using AI to help with their onboarding of merchants in a seamless and cost-effective way.
You’d be hard pressed to find a new model of smartphone without an AI-powered virtual assistant, helping consumers from everything to alarms, directions and payments. Mobile banking apps are increasingly taking advantage of this opportunity by creating their own AI assistants to allow customers to manage transactions through voice commands.
With AI expected to inject an increase of 10% by 2030 in the Gross Domestic Product (GDP) for the financial and professional services industry in North America alone, it’s a worthwhile trend to keep an eye on.
Want to know more?
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Published by Jonathan Psomadellis | Senior Marketing Manager