In this article, OpenEdge invites you to sit down in our fortune teller’s tent and peer deeply into the payments technology crystal ball. That’s actually allegory. We don’t really have a fortune teller’s tent or a crystal ball. We do, however, have decades of payments innovation experience and some of the smartest people in the field. Here’s where we see the payments technology headed in the near future…
EMV cards, embedded with a smart chip, began entering the U.S. market in 2015. The rollout of this security technology continues. Merchants and cardholders are still acclimating to the change. This deployment will plateau within the next few years. Once this phase of EMV is complete, expect a number of changes to how consumers pay for goods and services. EMV chips are already present in many smart phones, ensuring enhanced security for on-site mobile phone payments. This momentum will continue as we see fewer physical credit cards and more EMV-enabled mobile devices. Furthermore, the embedded chip is a tiny computing powerhouse; it’s capable of a great deal more than just secure transactions. The NFC antenna will make touchless payments more common. Personalized, relevant digital offers will flourish. EMV in the United States is only in its infancy; its adolescence holds great promise to streamline and complement the payments experience. Learn more about EMV at openedgepayments.com/emv.
2. Mobile Payments
Clearly, Apple Pay kicked the door open for mobile payments; Android, Samsung and others have barged through. We expect this will result in the rise of app-based store checkouts. Certainly, lines and countertop checkouts aren’t going anywhere soon. But expect options in the form of payment apps for use inside the store. Our crystal ball tells us that the distinction between offline and online payments will continue to blur. Learn more about mobile payments at openedgepayments.com/mobile.
3. Merging of Online Purchasing & Mobile
The ongoing mashup of payment methods deserves further exploration. We’ve seen an entire generation practically born with smart phones in hand and come up utterly at ease with internet purchasing. In fact, 2014 was the first year more people accessed the internet via mobile devices (rather than desktop). It’s no great leap to anticipate the merging of these technologies will lead to significant acceleration in mobile purchasing and transactions. Service giants such as Starbucks, Taco Bell, Domino’s and Pizza Hut not only report a high percentage of orders coming in online, but that app-based purchasing spurs significant impulse spending (“Yeah, I don’t mind if I do add some bread sticks!”). Look for a proliferation of the store-branded mobile payments app.
4. Invisible Payments
Invisible payments have been something of a catchphrase, but only because the practice is deserving of entering into our lexicon. Invisible payments are less about the transaction and more about the experience. Consider Uber – the payment component is embedded into an existing multi-functional app. The payment is, in fact, so submerged in the process that during surge periods, it is not uncommon to find Uber users unknowingly charged hundreds for a ride home. What other services will nestle payments comfortably into a broader app-based experience? Our prediction: bunches.
5. Contextual Commerce
1984 may be here thirty-three years late. The average consumer’s day is rich with online behaviors: surfing, social activity, sharing, liking, listening to music, playing games, searching, watching videos, getting directions. That data is captured and we all know the big internet players are slowly figuring out how to turn that information into purchasing activity. Our crystal ball says that online consumer behavior will shape and influence new relationships between brands and buyers. Buy buttons – personalized and intimately relevant to the potential buyer – will creep into our digital lives, redefining how we shop and pay.
Loyalty programs have been around for quite some time. They’re based on point systems and reward plans. Data use (again, back to data) is refining those antiquated methods for influencing customer behaviors. Earlier in this article, we discussed related technologies to capture consumer actions with surprising accuracy. We anticipate that new loyalty programs, integrated into payment applications and based on big data, will reinvigorate this old concept and help merchants drive new and returning business.
For our last prognostication, we’ll move off the online, mobile and data tracks. The unattended payment station looms large in the crystal ball. More developers' kiosk-based software and hardware components are entering the market. The signs of it are everywhere. Think of the places you use your credit card without the benefit of a human attendant: parking decks, gas stations, vending machines, car washes, locker rentals… In the near future, that list will expand and the technology will get better. Expect the payments kiosk to become ubiquitous.