Last year brought a number of technological advancements in payments that are building excitement for what’s to come in 2017.
Here are some of the payment innovations that are creating buzz among consumers, businesses, and merchants.
1. Changing Use of Countertop Checkout Devices
The idea that there will be changes in any countertop device used in a store for checking out is exciting for retailers who can reduce their hardware investment, while consumers get an improved purchase experience. Companies like Poynt are adding app capabilities that work with their POS hardware to help retailers take advantage of this trend.
While it’s not here yet, there are signs that this long-used process for in-store purchases is losing its relevance fairly quickly and will adapt to a new transaction process.
The changes are due to advancements in the overall mobile ordering and payments industry. Consumers are discovering the convenience of ordering their goods on a mobile app combined with in-store pickup.
With the advanced ordering arrangement, the payment is handled via mobile so there is no need for checking out when arriving at the store. For the merchant, this has led to higher-than-average order value and the need for fewer staff and equipment. The customer gets the added benefit of a speedy pick up.
All types of merchants are jumping onboard this process, including Walmart, Amazon, and Chick-fil-A, while others are starting to create new types of partnerships—like Walmart’s deal with Uber for grocery delivery service and UberEATS between Uber and various restaurants across the country.
2. Payments Are Getting Faster (and Better)
Everyone can get excited about the prospect of being paid at a faster rate. The idea that payments are going from five working days down to one day or less has anyone waiting for their money jumping for joy.
Some companies and regulatory bodies are continuing to debate how fast payments really need to be completed. And tech providers are saying it can be as fast as you want it to be, while still taking security and compliance into consideration.
The overall payment innovation here is the idea that payments are becoming better in terms of efficiency with processing and settlement, removing steps in the process that caused those five to seven working-day turnaround times for payments.
While those receiving the money can be excited about the speed, the rest of the stakeholders in the transaction process can also be thrilled by the efficiency gains. Part of the reason for this innovation relies on the increasing understanding of how to use cryptocurrency and the technology behind it known as blockchain, which serves as a distributed ledger for online transactions.
3. Contextualized Commerce and Social Payments
Payment innovation has enabled contextualized commerce and social payments, which also offer merchants, businesses, and consumers significant benefits and a new way of looking at the transaction process. More payment buttons are being placed where consumers are actually ready to buy within the mobile and online environment, including within the search functions of websites.
Additionally, social payments are taking off with the ability to pay others within Facebook Messenger, Instagram, and Snapchat. The result of both is increased transactions and money changing hands in a more convenient, low-cost way.
4. Migration from Digital Wallets to Digital Credentials
Consumers didn’t get as excited about the digital wallet as industry leaders anticipated, so now there is the idea that the next payment innovation may be more like a digital credential rather than an app where they have to enter and store a lot of information—which feels like a lot of work.
Instead, a digital credential would work like a digital loyalty card that does all the work for the consumer so that they only reap the benefits of convenience and ease of use. In this way, the consumer will always be connected to retailers and other places they make payments.
5. Proliferation of Payment Security Innovations
Merchants, businesses, and consumers are excited (and relieved) about increased payment and data security solutions. These innovations are helping to move more consumers to use mobile and online payment systems thanks to the use of biometrics and two-factor authentication to ensure the person making the purchase is actually the person on file as the record holder of the payment information.
Other increased security innovations have included encryption, tokenization, and EMV/chip-enabled cards.
This year shows no signs of a slowdown when it comes to technological developments related to payments, processing methods, alternative payment options, and security measures.
It is an exciting time to be participating in transactions as the world seems to be moving farther away from traditional currency and more toward a global digital payment system.