5 payment trends for financial institutions
The biggest challenge today for financial institutions is to meet their cardholders’ expectations for fast, convenient, and secure payment experiences. To help navigate the rapid changes in payments, financial institutions should keep an eye on the following five trends:
- Security is a main concern for today’s cardholders.Payment solutions like eWallets and biometric technology can ease security concerns. eWallets offer cardholders security and convenience through advanced encryption, tokenization, and device authentication methods. Biometric solutions provide cardholders secure payments on their mobile device and at the point of sale.
- Faster payments are around the corner. New regulations and government-backed programs are pushing firms to enable faster payments and strengthen security. This includes the US Federal Reserve’s Faster Payments Project, the European Union’s Revised Payment Service Directive (PSD2), and industry-backed projects like the Faster Identity Online Alliance and EMVCO’s Secure Remote Commerce framework.
- Payment preferences are shifting to digital. The digital-only banking wave is finally poised to hit the US. market. Person-to-person (P2P) payments will also remain strong thanks to players like Venmo, Zelle, and Apple Cash Pay. Retailer branded closed-loop offerings will also present new opportunities within the P2P space in 2019 and beyond.
- Contactless payments are here, but issuers need to catch up. The US is poised to embrace contactless payments, as the EMV conversion drove installations of terminals with NFID capabilities, however we’re still waiting on issuers.
- New technologies are taking hold. Technologies like blockchain, virtual assistants, and the Internet of Things (IoT) have enjoyed strong buzz over the past few years, but still have a long way to go before offering meaningful value to issuers and cardholders.
For financial institutions, the most critical action to take now is collaboration with fintech innovators. To compete with behemoths like Apple and Amazon, financial institutions and fintechs must join forces. The ultimate goal must be to meet cardholders’ expectations for a fast, convenient, and secure payment experience. Click here to read the full report.