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Ingenico Group strategists highlight one dozen payment trends for 2020



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Veterans of the payment industry can remember the advent of point-of-sale electronic terminals back in the early eighties, and one of the early pioneers in this effort to automate merchant acceptance of payment cards was Ingenico.

The Ingenico Group, headquartered in Paris, France, has grown and prospered with the industry over the past four decades. Annual turnover exceeds 2.6 billion euros, and 7,500 employees serve all major markets. Simon Fairbairn, Director of Solution Development at Ingenico Banks & Acquiring, shared his 12 key payment predictions for 2020 with the Payments Journal:

#1 – Fraudsters Innovate Too

Fraud at the POS will show no let up in the year to come. As security professionals warn, you will never eliminate fraud, but you can try to manage it within acceptable limits. Authorised Push Payment Fraud (APP Fraud) became a greater problem in 2019, rising by an estimated 40% in the UK alone and eclipsing £616 million in losses. As new standards like PSD2 and Open Banking spread, criminals will try to test the boundaries of new systems with newer techniques. Do not be surprised when banks resort to payment delays, Strong Customer Authentication, 2 Factor Authorisation, and Confirmation of Payee.

#2 – Digital Payment Rewards

For the past decade, retail marketers have dreamed of combining loyalty programs with customer smart phones to provide in-store personalized offers. The effort required a great deal of coordination and cooperation, and as a result, initiatives have splintered into an amalgam of various methods. Newer terminals can facilitate direct customer contact and provide a basis for offering more rewards for digital payments, enhancing customer loyalty and allegiance with specific brands, and collecting data on the customer’s buying habits for further follow up.

#3 – More Data, More Powerful Artificial Intelligence

Up until now, Artificial Intelligence (AI) applications in the payment world have focused on fraud prevention, analyzing data on the fly with prior buying habits with special algorithms to detect suspicious transactions. Newer AI applications will begin to appear elsewhere in the payment ecosphere in 2020, assisting in credit grading and granting, providing automated customer support services, and enhancing any digital interactions that the customer might have during any segment of the payment and billing stream.

#4 – New Smart City Payment Options

“Frictionless Payments” is a new term that has entered our lexicon, of late, to describe the use of contactless payment devices to enable a cash-free public transit experience. Whether a ride on the tube or bus, cities are increasingly adopting these “smart” methods of payment. Current estimates are that there have been over 1.7 billion frictionless journeys facilitated by this technology. Expect more of the same in 2020, along with new approaches to tackle existing challenges with ease of use, disruption, and, of course, security issues.

#5 – Smarter Purchase Suggestions

Online retailers follow with great interest any digital discoveries that Amazon uncovers in its quest to satisfy its customers and enhance their shopping experience. As reported: “This year, Amazon generated 35% of its revenue from its recommendation model, which utilises customer data to deliver smarter purchase suggestions.” AI solutions are jumping into this space and allowing for the real-time generation of methods that will push the boundaries of how customer data can be used to influence his buying habits. In 2020, you can expect a host of retailers to jump onboard this “train” and add a few unique features of their own.

#6 – Generation X and Z Demand More Payment Security

Customer demographics play a large role in determining how retail marketing programs are designed and implemented. Baby Boomers have been superceded by Generation X, Millennials, and now Generation Z. New studies have highlighted that Gen-Zers, those born after 1994, have grown up with smart devices in their hands and have learned that cyber thieves are a big problem. They demand that banks provide more secure payment methods, much more so than Millennials, who were greeted by the Internet and offered up their trust far too easily. Criminals have shifted their focus on younger targets, as a result. Gen-Xers do not want to be left behind and are demanding more security, as well.

#7 – The Rise of Social Commerce

Ingenico staffers believe this phenomenon will be the main “mover and shaker” in 2020. The line, as they see it, between social media and ecommerce has become very blurred. Platforms like SnapChat and Instagram can enable quick, short media marketing bursts in video segments that are the primary drivers of advertising in these arenas. Surveys already show that 91% of viewers prefer this type of ad, and with numbers like that, you can expect a flood of video content, personalized by AI algorithms and directed directly to the customer, wherever he might gravitate.

#8 – Digital ID Becomes King

Personal identity confirmation lies at the core of all online and in-store retail fraud prevention programs, but consumers are getting weary of an inordinate number of logins and passwords, let alone being charged for the privilege of changing a banking password. Digital ID methods need not necessarily depend upon biometrics. It can take something as simple as a phone number or other numerical attributes to validate that you are “you”, primarily online. Long passwords and long verification delays only add to the frustration. Per Ingenico:

In 2020, Digital ID will help eradicate these bugbears while providing numerous economic benefits and more secure identification for consumers.

#9 – Relentless Collaboration

Open Banking is the new buzzword in payments, where service providers can securely access your financial payment information, but only with your approval. The goal is to allow for third-party apps and services to be developed, which can augment the services of your bank. In order for this new ”theme” to work, there will need to be a great deal of cooperation between all parties involved. Hopefully, there will also be more opportunity for innovation so that all parties benefit.

#10 – Make Payments with Cars

We are constantly told that the Internet of Things (IoT) will eventually make all devices “smart” and able to communicate. Up to now, this revolution has not focused on payments to any large degree, other than banking apps on your phone, which security minded folks are still a bit leery of. What platform is left? The family car is the next great opportunity for “smart-ifying” a device. According to Ingenico:

By 2023 it’s estimated that 775 million cars will be connected through telematics or in-vehicle apps accounting for $63 billion in transactions that year. If these estimations are to be achieved, over 2020 we’ll start seeing IoT payments for petrol, tolls and food.

#11 – Banks and Card Payments Converge

As real-time payment innovations become accepted and ubiquitous from initiatives like Open Banking and PSD2, there will come a time when consumers are offered an option to choose their payment method at the point of sale, whether online or offline. New forms of immediate payment plans will also support such choices in that the first payment may be immediate with the balance collected the regular way over time. Each route will have varying benefits and cost schemes, which will allow for incentives to guide the process.

#12 – Invisible Payments

Lastly, service providers like Uber and Amazon Go have created “internal” payment rings that bypass the traditional card payment route to streamline the process, offer the consumer a quick and frictionless way to pay, and short circuit fraudulent activity. At the heart of every successful payment system is convenience. Look for service providers to establish their own “payment rings” to address the need for convenient lifestyles.

And there you have them – 12 payment trends for the year ahead. If you wish to count down each one over the ensuing twelve days of Christmas, while searching for five golden rings and that elusive partridge in a pear tree, be our guest, and Happy Holidays!

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Ingenico Group strategists highlight one dozen payment trends for 2020

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