As I step into my new role as Accenture’s global payments lead, it got me thinking about the constantly evolving industry landscape—and the themes that will play important roles in that evolution the remainder of the year. I’ve divided my selections into three categories: Established Trends, Building Trends and New Trends, though some are applicable to more than one category. Take a look.
- Contactless payments will continue to grow at 100%+ in Europe—expect more than 40bn transactions, all told.
- Cash will experience an accelerated decline across Europe. Expect fewer than 1.8bn ATM withdrawals in the UK (which peaked at 2.9 bn in 2012).
- Real-time payments will grow quickly where they have been established for many years. Faster Payments volumes in the UK will exceed 2bn transactions.
- Mobile wallet payments such as Apple Pay and Samsung will experience strong growth.
- Propositions using PSD2-compliant APIs will appear gradually. Expect bank and fintech applications such as account aggregation to appear in the first half, followed by retailer applications in the second half.
- Infrastructure renewal programmes will appear around the world, for real-time domestic payments and RTGS wholesale payments.
- Real-time payments adoption in Europe will be slow. While a large number of banks will implement the technology required and connect to new real-time central infrastructures, volumes will remain low until at least 2019.
- Some banks will start building cloud payment solutions as an alternative to on-premise technology.
- Request-to-pay as an invoicing and payment method will emerge as a proposition in several countries.
- Mobile wallets from China, already accepted by many retailers in Europe for Chinese nationals, will take advantage of PSD2 account access to launch services targeted at Europeans.
- Wearables for payments will start proliferating with new devices and fashion accessories.
- Although most banks will still shun Bitcoin, expect to see cash management products appear aimed at corporate treasurers using Bitcoin and Ethereum.
- Ethereum will grow rapidly in popularity; its market cap will exceed Bitcoin by year’s end.
- Ripple’s network for cross-border transactions will grow significantly, attracting more banks and corporates, which will lead to rising transaction volume.
- The consumer experience for payments will become a battleground for banks, especially around authentication for PSD2 on third-party applications.
- Challenger bank adoption will be much higher than in the past due to their superior customer experience for payments.
- Biometrics such as facial, voice and hand-movement recognition, now robust enough for mass use, will be adopted by banks and fintechs as a weapon in the consumer experience battle, and also for securing cryptocurrency wallets.
- Retailer wallets for both ecommerce and in-store payments will start appearing in sectors such as supermarkets, fuel and quick-service restaurants, emulating the success of Starbucks and Walmart, and focused on a slick checkout process using biometrics.
- Retailers will start demanding new payment methods for recurring payments for subscription- and credit-based services.
- Fintechs and banks will see the importance of linking credit and payments. Expect to see this as an emerging theme in payments innovation.
- Voice-activated payments will start appearing as Google Home, Alexa, Cortina, Siri, etc. grow in popularity.
- Central banks around the world will warm to the idea of issuing their fiat currency on distributed ledger technology—and at least one will have concrete plans to implement the technology.
- As banks adopt real-time payments in economies such as Australia, Europe and the US, new capabilities will emerge to operate in real time, for example, corporate cash management solutions for real-time cross-border payments, virtual accounts and fraud innovation.
I welcome your thoughts on these predictions—and encourage you to share your own. Thanks for reading!