Bank operating models and the infrastructure landscape will start seeing some major changes. Outsourcing of core back office payment processing will be on the agenda for banks, even large ones with scale in interbank payments, especially in Europe; and existing payment processors will develop new capabilities to meet this demand. Demand for real-time payments to support real-time customer experiences in digital commerce will drive banks in many countries to implement national real-time interbank payment infrastructures.
Finally, from a technology perspective, the payments industry will start exploiting tokenization, host card emulation, NFC, application programming interfaces (APIs), mPOS/POS integration and blockchain technologies (and the USA will embrace EMV for cards).
- Outsourcing of interbank payments processing, especially in Europe, will become a viable alternative for mainstream banks instead of replacing internal payment processing platforms.
- Real-time payments will grow and attract investment from the banking industry as regulatory pressure and the urgent imperative for real-time mobile payment consumer experience overcome historic difficulties in building industry consensus for national infrastructure
- At least two countries in Europe will commission national real-time interbank payment infrastructures
- Cross-border interoperability of new real-time interbank payment infrastructures will become a major theme of debate, especially in Europe
- Open access to national payment systems by non-bank Payment Service Providers will become a major theme of debate in many countries – in the UK, changes are likely (catalysed by the Payment Systems Regulator)
- APIs (application programming interfaces), where Payment Service Providers (including banks) expose their payment systems to third parties, will become a key technology disruption in payments (alongside tokenisation, host card emulation, NFC, crypto-currency and blockchain technologies).
- Retailers deploying mPOS solutions inside and outside their stores will integrate them with existing POS and ecommerce infrastructure to create omni-channel payment capabilities.
Each of these predictions has important implications for our banking and payments clients, and focusses on the emerging trends and innovations we will see in the payments domain in the coming years. I will report back in 2016 on the actual outcomes!