The shifting trends of payment technology
Every year financial institutions must adapt to new improvements within the industry, and 2018 has been no exception.Technology is the driving force to improve payments and staying current with technological trends will help your financial institution stay relevant. Take a look at the current trends of 2018 and what developments we expect to see over the next few years.
- Mobile solutions have become essential to any financial institution’s repertoire. Mobile devices provide a combination of proximity, rich interfaces, and portability that have made them an indispensable part of everyday life for consumers. And, Open Application Programming Interfaces (APIs) have become a way for financial institutions to provide quick and efficient hybrid services.
- EMV and mobile wallets are slow to be adopted by merchants and consumers alike. Card issuers have mostly completed migration to EMV chip cards although it appears that merchant adoption remains sluggish. Merchant wallets continue to grow, as rewards for their cards steadily increase.
- Payment trends that have grown tremendously in 2018 and will only continue to expand are improved account-level controls. Card issuers have increased account control features, including temporarily disabling a card, limiting geographic regions and total spending over time.
- Faster payments aren’t just a trend, it’s a force that continues to grow, and faster payment options are being prioritized among consumers. The Clearing House’s Real Time Payments is focused on business-to-business payments. In addition, person-to-person payment platforms such as Venmo and Paypal have become synonymous with immediate fund transfers. Many financial institutions have adopted applications that support P2P and B2C payments.
- The rise of Fintechs have posed a credible threat to traditional financial institutions, however it seems that FIs will have the advantage as long as they continue to provide personalized service to their customers. With that said, it would be wise for FIs to consider working with Fintechs to increase their service options.
- Merchant services have also seen upwards trends in 2018. Single merchant based mobile apps, like the model pioneered by Starbucks with expand most rapidly over the next year. While universal pay apps such as Apple, Samsung and Google, are battling slow adoption rates. Unlike the single merchant model, universal pay apps have failed to integrate loyalty and reward features which have been shown to increase usage and higher adoption rates.
The next few years will be a tumultuous time for financial institutions, as well as processors and merchants. Investing in technology whether through Real Time Payments, APIs or Fintechs, will pay off. Partnerships with other payment industry participants seem to be safer than going at it alone. Technological shifts will impact every aspect of the payments industry, and the best way for your financial institution to succeed is to stay ahead of technology trends.
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