Will 2016 be the year of technology or the year of security? At Vantiv we believe both will be of utmost importance for businesses and their customers. That’s because in addition to the ever-expanding catalog of new payments options, security is also pushing to the forefront with changes – such as EMV, tokenization and encryption.
Following are the four biggest integrated payments trends to watch in 2016. From increased security standards and mobile payment options to accelerated innovation cycles, these trends present challenges and opportunities for businesses:
- New Payment Technology Will Drive Innovation
With increasing competition, small businesses and partners need to find efficient methods to stay engaged with existing and new customers. For example, The Salvation Army began using DipJar’s credit-card enabled tip jars at some of their donation spots – an innovative alternative to an increasingly cashless payment environment. 2016 will see more businesses improve customer retention and growth through the utilization of new technology in the payments industry.
2. Payment Security Won’t Stop with EMV Alone
According to a report by BI Intelligence, payment card fraud cost the U.S. $7.9 billion in 2014. That’s almost a 60 percent increase over the previous five years. The EMV liability shift will continue to be a hot topic this year, and while EMV is certainly an important part of the overall security picture, it is just a piece of the puzzle. Other security tactics – like encryption and tokenization – will play a huge role in securing the transaction process. While some merchants may not be ready to migrate to EMV, they still need to be aware of other methods to secure their business.
3. Mobile Payment Is Growing Quickly
The use of mobile payments isn’t a new concept. In fact, different offerings have been around for years. But in 2016, we will finally see significant adoption. According to a study by Juniper Research, 1.5 billion mobile wallets will be in use globally by 2018, which would account for roughly 1 in 5 phones. Accelerated innovation cycles will create an explosion of payment use cases, with more opportunities to attract customers and keep them coming back.
4. More Consumers Will Use Merchants’ Mobile Apps
Notice an increase in merchant mobile apps that offer convenient ways to order, or discounted prices on merchandise? One example you might have seen is Starbucks, whose Mobile Order & Pay app drove five million transactions in less than a month. Now, more than 20 percent of Starbuck’s mobile transactions take place through the app. This trend can be seen across other merchants – including Domino’s Pizza, Taco Bell and Walmart – and part of a larger trend that is seeing more and more downloads of merchant apps and an increase in mobile sales.
The overarching trends for integrated payments this year are security, and the evolution of how we pay and interact with merchants. While EMV integration continues past the liability shift, security won’t stop there as tokenization and encryption will be viable ways to ensuring a more secure payment environment. Most agree that many merchants will also notice a shift towards online fraud and Vantiv can help those businesses with our advanced fraud toolkit.
Merchants will need to explore various payment methods until they find what works best for their customers. Whether that’s accepting mobile payments or releasing easy-to-use apps of their own.
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