payments Report
Twelve Payment Predictions Which Might Change Your FinTech Strategy
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By Simon Fairbairn
ith almost 40 years in the industry, the collective payments expertise of the Ingenico team is unparalleled. So, as the new year begins, Simon Fairbairn, Director of Solution Development at Ingenico Banks & Acquiring, considers 12 key payment predictions for 2020. 1. Fraudsters Innovate Too In 2019, Authorised Push Payment Fraud (APP Fraud) rose by 40 percent, costing the UK £616 million. Thanks to PSD2 and Open Banking, we will continue to see more new players in FinTech. This is brilliant, but it means fraudsters will inevitably innovate their techniques, too. As a result, in 2020 we will see banks enhance their security and implement measures to protect customers, such as payment delays, SCA, 2FA and Confirmation of Payee. 2. Digital Payment Rewards Alongside enhanced security, monetary savings and ease of use, digital payment rewards will increasingly become embedded in payments as a value-added service. These types of loyalty initiatives provide opportunities to engage directly with customers and are useful to increase customer allegiance with brands. With innovative payment terminals on the rise, such as Android, that offer enhanced applications and collect more consumer data, customers will expect more personalized offers. Organisations will deliver them in 2020. 3. More Data, More Powerful AI Often thought of as just for use with fraud prevention, artificial intelligence (AI) has enormous potential to improve the payment ecosystem for banks, processors, merchants and, ultimately, consumers. Together with companies using AI to analyse certain patterns and algorithms in data to detect fraudulent activity, retail payments will also use this technology to enhance digital interactions in voice commerce and mobile banking. 4. New Smart City Payment Options For the last few years we have seen the beginnings of frictionless 42
FOUNDATION Magazine
January/February 2020
towns and cities across the globe. The TfL tube system and contactless buses are a prime example of an effective cashless system — since its inception over 1.7 billion frictionless journeys have been enabled. In 2020, cities will implement new smart payment options by joining forces with the right partners and platforms to counteract new challenges, including ease and speed of implementation, disruption and data security. 5. Smarter Purchase Suggestions This year, Amazon generated 35 percent of its revenue from its recommendation model, which utilises customer data to deliver smarter purchase suggestions. By using data to personalize suggestions, retailers are truly listening to customers and continuously pushing the boundaries of shopping experiences. In 2020, we’re going to see more retailers following in Amazon’s footsteps, either in store or online. 6. Generation X Demand Payment Security A lot of the fintech revolution has been driven by millennials, for millennials. As this demographic seeks and demands new ways to pay, Open Banking continues to enable new players in the payment ecosystem for millennials as well as Gen Z, a third of whom are estimated to have opened at least two new accounts with a challenger bank within the past five years. While the focus has predominantly been on these young demographics, their older counterparts, such as Gen X, are being left behind. As such, in 2020 we will likely see Gen X demanding that the basics of their financial services, such as security, are prioritized over anything else which might cause a generational divide. 7. The Rise Of Social Commerce Social commerce is indisputably going to be the breakout trend for ecommerce in 2020. The line between social media and foundationmag.ca
