2020 is the year of disruption across many fronts, including the payments industry. Propelled by the pandemic, our digital revolution and need for hyper-connectivity has accelerated and will continue to do so in the coming years.
#1 Data more valuable than ever to ensure seamless payments
Data is the fuel that drives business decision-making. It is valuable for understanding consumer spending behaviour and habits, personalisation and optimising user experiences.
In exchange for giving companies access to valuable data, customers expect a more simplified and seamless experience, including payments. No longer do customers want to complete lengthy forms before you can make an enquiry, or buy a product. Nor do they want to enter the same information twice when they access different services from the same company.
Many e-Commerce players are already embedding data into their marketing strategy, from product recommendations to up-selling.
The same principles apply in streamlining the payment process. Companies will need to invest in data analytics and big data tools that offer reliable predictive customer behaviours to tailor product recommendations and solutions. Simplified and seamless customer experience can be achieved with an integration of omni-channel platforms, APIs, IoT, and access to open banking data.
Traditionally banks have been a bit slow in applying their wealth of data into customer engagement, opening the door for disruptors such as neobanks, BNPL and lending services. In 2021, we’ll likely see FinTechs unlock new revenue streams that monetises payments data.
#2 Digital payments will continue to accelerate post-COVID-19
There’s little doubt that we are in midst of a cashless, digital revolution.
Cashless payments have far overtaken the use of cash in Australia, well before COVID-19. The same trend is seen worldwide. The World Payments Report 2020 predicts that cashless payments will propel to over 1 billion dollars by 2023, with Asia-Pacific taking the lead.
Enabling the cashless trend is the acceleration of mobile usage, including payments. According to Rescue Time research, people spend on average three and a half hours on their phones each day, and we predict that the trend will only continue to grow.
COVID-19 has further propelled our use of digital payments, with countless innovations to drive convenience and speed of the online shopping experience. One-click checkout is becoming more and more common, such as Visa’s ‘pay to click’ or pay with Google Pay.
In 2021, we’ll begin to see more sophisticated payment features on mobile beyond the ability to check, transfer and receive money. Gamification, financial management and automation will become typical features of many payment services.
#3: Secure underpins all payment solutions
Since COVID-19, we’ve seen renewed effort to combat fraud and raise the bar on safety measures, such as Anti-Money Laundering Directive, data protection and cybersecurity. With more open data available, more companies are identifying risk compliance as their most critical focus areas.
According to a research conducted by VMWare, 87% of executives reported a high likelihood of cyber vulnerabilities. COVID-19 has created an environment favourable to cyber criminals, sparking a 238% increase in attacks targeting the financial sector.
So what will 2021? With cybersecurity remaining a constant threat, it is time for payment technology to up the game in security. Increased security measures, especially for digital payments, will be the key focus for many companies in the years to come. Tokenisation, which allows your actual account numbers to be protected online and the use of biometric identification, such as a fingerprint or iris scan, will make payments more secure than ever.
At Vasco Pay, we can help turn your payment idea into a reality. Learn more on our Enterprise Solution page.