We can expect to see some big changes to payment processing this year, but none of these will shock anyone who’s been paying attention. Rather than new themes, we’re seeing trends that have been building for a while.
For example, conventional payment methods are beginning to take a backseat to digital systems. Banks and financial institutions are focusing their efforts on more advanced payment processes. (This is fueled, in part, by a push for tighter cybersecurity.) Business leaders need to embrace these emerging trends to stay relevant.
Let’s examine three specific payment processing trends that are set to dominate the payment processing landscape this year.
1. Biometric authentication
Security is always a top priority in the financial world, and hackers are becoming more sophisticated. Relatively insecure payment methods and processes may become less popular in 2020. This could include ATM cards with four-digit PINs.
Apple Pay, Android Pay and other apps are pioneering the biometric authentication space. Functionality has evolved from basic fingerprint recognition and face recognition, and iris scanning, heartbeat analysis and even vein mapping have become realities.
Improved security isn’t the only potential benefit. Biometric authentication for payments is predicted to improve accuracy and efficiency as well.
For businesses, being open to these technologies is critical as they’ll soon become mainstream. Those that accept new payment methods will attract a larger pool of customers.
2. Cards give way to codes
Traditionally, bank accounts are identified and accessed using a series of digits as an account number. However, this is projected to give way to new techniques developed to enhance account security.
For example, bank accounts may be based on unique codes that change each time a transaction is made. This would make it much harder to hack an account.
In the augmented reality, Internet of Things (IoT) and blockchain sectors, code-based banking will be critical.
3. Mobile is king
The prevalence of smartphones continues to skyrocket. More consumers are using their mobile devices to make purchases and send payments.
Younger, tech-native generations are starting to make up a larger share of consumers. As such, this trend is a must for all businesses. Banks, for example, are positioning mobile technology at the center of marketing campaigns. Other companies are introducing mobile apps and loyalty programs. These deliver rewards, offers and discounts to their customers.
Remember, if mobile payment technology is not embraced by your business, you risk becoming irrelevant. It’s that simple.
How to Respond
Being aware of emerging payment processing trends is a start. But if your business is to compete in the fast-evolving retail landscape, you must take action.