2018 going on 2019An Overview of the Payments Industry
If there was any doubt before, 2018 made it clear: e-sellers who paid attention to consumer desires and made efforts to provide appealing delivery and payment options are the ones whose business will boom in 2019 and beyond. Almost 270 million people shopped regularly online in Europe in 2018, spending around €198 billion; and 200 million consumers made their purchases in foreign markets. Payment services PayPal and Venmo experienced a combined increase of 24% in transaction volume in 2018 compared to 2017 - a jump from $6.1 billion to $7.6 billion.
Omnichannel Through a Single Lens
But online shopping wasn't the only significant trend in 2018. Omnichannel was a word frequently mentioned with regards to payments, and for a good reason: the number of payments options has been steadily increasing. What is needed now is an interface that will present all the various options in one place and allow the customer to seamlessly switch from one to another. The drive to apply EMV security standards to all payments channels, from debit to P2P further stressed the importance of true omnichannel.
Old Hardware, New Software
The rapid increase of payment options also caused some headaches to retailers, since it required constant hardware upgrades.
Luckily, payments software developers stepped in and provided a cure for their troubles.Consequently, 2018 saw an increase in software updates that allowed existing hardware to remain compliant to new payments options and reduced retailer costs with regards to POS systems. Systems such as Square and Vend offer retailers multiple functionalities, from inventory management and ecommerce to accepting everything from cards and checks to digital receipts and gift cards.
Retail on the Rise
Retail itself has been experiencing a significant shift as well. Where not so long ago "unattended retail" was reserved for the sale of soft drinks and snacks, the trend is spreading to everything from makeup and electronics to over-the-counter medicines.
The projected growth of up to $34 billion by 2023. This has also affected the payments infrastructure for unattended retail with the offer of credit, debit and contactless options.
According to a report by PYMNTS, research in the UK
discovered that 53% of male customers prefer service checkout lanes. In addition, 16% of all consumers mentioned self-checkout as a driving factor when choosing a grocery store.
Trends to Expect in 2019
Savvy businesses will keep
their eyes on retail, which is making its next step: incorporating the
technology and the concepts from AI and Internet-of-Things.
This is being dubbed "intelligent retail", and hopes to provide AI-driven outlets that will tailor their shopping experience to a specific customer.
While on the subject on AI, digital advisory services are also expected to improve in 2019. The aim is to have them draw on a customer's banking and non-banking data and provide real-time, relevant advice and suggestions when a customer is making payments, such advice ranging from pointing out offers to keeping track of utilities spending.
As the digital revolution moves onwards, digital banking steadily grows. More and more bank and PSP customers use digital channels to check their account balance and transfer funds.
More and more bank and PSP customers use digital channels to check their account balance and transfer funds. Investments in digital developments are being made across the board, from traditional banks to up and coming FinTechs.
New Games, New Players
In fact, it's these
traditional players that are expected to keep developing their own digital
solutions in 2019, as competition in the payments fields grows fiercer.
A good example is the digital money transfer system Zelle, which was developed by several large US banks in order to compete with Venmo.
The biggest new player in the field in 2019 will be China. The meteoric rise of Alipay and WeChat's payment service, combined with China's billion regular mobile payments users, makes it clear that China's influence on global markets will only become greater.
China has already affected some unexpected markets: Finland's mass introduction of mobile payments is due to it being the preferred method of payment for Chinese tourists.
With Chinese investors spending billions on payments in places like Singapore and India, 2019 just might be the year China makes a foothold in the Western payments industry.