January 1, 2015
We compiled predictions and outlook in payments and commerce from 3 leading advisory and research firms working in this sector:
Richard Hall, Director of Commercial and Enterprise Payments Advisory Service, cited:
As corporates seek more efficiency through actionable transaction data, players need to focus on execution to deliver solutions effectively. This is a crucial time for all players in the space, and the perception of corporate payments being far behind consumer payments should not hinder their finally thinking about innovation.
Tristan Hugo-Webb, Associate Director of International Payments Advisory Service, cited:
Looking to 2015, a few themes are truly global in the payment industry around the world. One is consumers' continued shift from cash and checks to electronic payment instruments like debit, credit, and prepaid cards. A related theme is their increasing preference for making transactions online and via mobile phone.
Nikhil Joseph, Analyst, Emerging Technologies Advisory Service, cited:
The transition to EMV, Apple Pay, and the median age of millennials inching higher (27 next year) will finally jumpstart mobile payments at the point of sale. Migration to EMV is motivating savvy merchants to reimagine the whole retail experience using BLE, NFC, QR codes, real-time analytics, and native apps...
1.) Predictive Analytics and Limitless Possibilities with Big Data - There is a wave of data science driven analytics that is often predictive and real-time. It is coming to our shores as a tsunami! It is big, all-consuming, and very fluid just like a real tsunami, but it’s the opposite of destructive. The data wave is not only connecting, calibrating, and creating new opportunities but also unleashing new experiences that have not yet been articulated.
Some easy examples here are personalized digital offers, dynamic pricing for goods and services, risk scoring for authentication, risk rating for lending, etc. The more interesting examples will involve synthesis of multiple, disparate data sets from multiple industries, both real-time and historical, almost there mashed up to generate a nuanced understanding of consumer behavior and an unprecedented ability to generate experiences that delight.
2.) Some of the 'biggest' problems have not been solved - There has been much focus lately on proximity payments and that will continue in 2015. Online payments has come a long way but mobile wallets and in-the-store payments have to still become mainstream. As Tim Cook said that 'we still carry our wallets'. Using NFC and other contactless technologies in convergence with mobility and cloud, innovators have raised the bar for proximity payments in 2014 with Apple Pay. In 2015, the mobile wallet will become all encompassing with opening up of NFC on iPhones and opening up of regulations around driver id integration amongst other things. With Apple Watch and Apple Pay 2.0 (expected), we are having a very positive outlook for in-store, physical location payments in 2015.
3.) Proximity marketing moves beyond pilots - These solutions compel customers to act on a call to action from a marketing message which is broadcasted in contextual format using proximity technologies. This is the new age frictionless engagement, using QR codes, NFC tags, SMS and Beacons delivered to Smartphone and Tablets in a contextual setting. Some of the companies working in this arena include Inmarket, Shopkick, Powa, Proxama, Thinaire and Nomi.
As electronic payments grow in volume, merchants stand to gain in terms of loyalty and reward programs as well. Un-precedented innovation is expected in 2015 at the intersection of payments, commerce and marketing.
Philip Gomm, Director of Core Banking for Capgemini financial Services, cited to the Financial Review:
Financial services is in a significant period of evolution, as we see compound growth rates in electronic transactions. Innovation in customer facing transactions is now driving the need for transformation at the back end. The banks will argue that so long as the primary vehicle for their customer funds remains their bank account, they are less inclined to be challenged by the alternative solution providers. To a degree, that argument is sustainable, but over the long term, banks have to offer the same level of convenience to encourage you to stay with them and not risk disintermediation. Banks may need to share more parts of the value chain with non-banks, as regulatory and industry changes brings a new landscape.
Jean Lassignardie, Chief Sales and Marketing Officer for Capgemini Financial Services, cited in an official press release:
The pressure is on from both competition and new regulatory initiatives to provide next generation innovations like Square, iZettle, and Swift for tangible customer value. This requires providers to develop a long-term vision for payments processing that can be tactically executed through strategic, agile, short-cycle projects where quick wins are captured while building longer term value-add.
Deborah Baxley, Head of Capgemini's Global Cards and Payments Consulting Practice, cited in an exclusive article on TechRadar:
NFC promises to open up a whole new world of payments-related innovation including location-based services, couponing, loyalty and marketing, which will provide further incentive for consumers to use the mobile wallet. Eventually, NFC and mobile technology will eliminate plastic cards, make payments more secure, and make people's everyday lives easier.