Future Payment Trends

Since the highly public retail data breaches were announced in the winter of 2014, retailers have made limited investments in improving their in-store payment, check-out or Omni-channel payment experiences. Instead, we saw retailers focus their payment systems investment first on data security projects and then on implementing EMV. While not everyone has completed their EMV implementation yet, many retailers have started to look at what payment trends, innovations and technology they should consider investing in or adding to their store systems payment technology roadmap.

As we talk to retailers about payment trends, most clients ask us the following questions:

• What payment innovations will provide them with the greatest benefits?

• What payment initiatives have other retailers implemented? What benefits have they achieved?

• What initiatives are other retailers looking at and why?

• What technology should they look at to implement payment innovations and why?

• Can Verifone educate us on these payment trends and technologies?

• Can Verifone help us develop a payments roadmap and implement a payments infrastructure to make it easier and less expensive to implement future payment initiatives and technologies?

Over the next few months this column will take a look at payment trends and innovation post EMV and attempt to answer the questions that clients ask us.

As we look at all the payment trends, technology and hype, we have grouped them all into 15 different payment trends we see over the next several years. We have then divided those 15 trends into three groups based on their maturity, proven technology and benefits and the expected time it will take to gain market adoption.

Current Payment Trends

Current payment trends are payment trends that have proven benefits, have moved beyond pilots and a sizeable number of retailers have implemented or are in the process of rolling them out.

1. Security, including encryption, tokenization and EMV.

2. Retailers wanting to get out of the payments business and focus on their core business.

3. Semi-integrated payment architecture to isolate payments from their POS Solution.

4. Mobile POS to bring check-out to consumers in and out of the store.

5. Basic contactless mobile payments.

Near Term Payment Trends

Near term payment trends are payment trends that in the pilot or experimentation stage, have demonstrated some success but have not yet crossed the chasm to widespread adoption although we expect to them do to begin widespread adoption in the next one to three years.

1. Mobile Wallets with enhanced functionality like loyalty, ordering and offers.

2. Omni-channel payment solutions to enable a complete Omni-channel consumer experience.

3. Outside of North America Merchants will start to acquire their own payment systems.

4. Growth in the acceptance of global payments such as Interac debit, AliPay and China UnionPay.

5. Frictionless Payments which make payments disappear as part of the commerce experience similar to the Uber experience.

Longer Term Payment Trends

Longer term payment trends are payment trends that are being discussed and have the potential to improve or disrupt current payments but have not yet moved into pilots (beyond maybe one or two) and are likely to be adopted occur more than 3 yearsfrom now.

1. Beacons as a key technology component in the payment process (versus as a location service).

2. Payments being driven by or as part of the Internet of Things.

3. Enhanced authentication technologies to provide enhanced security in the payments process.

4. Digitization of payments and removal of reliance on actual physical card numbers.

5. Faster payments as being developed and discussed by the Fed and NACHA.

If you see any additional trends we should include, if you disagree with the categories we placed trends into or if you have any insights to share about these trends, please email me at Jeff_W7@Verifone.com.

Next month we will start to dive deeper into each of these trends. Sign up here to receive the monthly insights contained in Verifone Slice.