As the phenomenal upsurge in fintechs, together with the rise of Generation Z, continues to disrupt the payment industry, traditional providers are heavily motivated to rethink the deliverance of payment solutions, which begs the important question - what will the future of payments look like?
Here, we reveal 5 of the most influential payment trends in 2020 (and exactly what you need to know):
1. FinTechs and Traditional Providers Come Together
While the payment industry has already been disrupted by fintechs, it's predicted that banks and traditional providers alike, will not be able to survive the growing user demands of Generation Z without joining forces with fintechs (Driving the Future of Payments: 10 Mega Trends, Accenture Consulting).
FinTech, or simply 'fintech', is short for 'Financial Technology,' which is a term commonly used to explain a business that utilises present-day technology and software to provide financial services. The current market sees over 12,000 fintech startups from across the globe, while Goldman Sachs approximates the value of the fintech industry to be a staggering $4.7 trillion.
2. Contactless Payment Technologies Diversify Across the Globe
Despite popular belief, Australia actually "leads the world in contactless payments," (Westpac) while US banks only introduced contactless cards earlier this year (Financial Times).
However, the United States' digital hindrance may not come as a surprise for readers of our previous piece, Why Do Americans Still Favor Checks?, which elucidates exactly why Americans prefer this traditional method.
Now, as the industry sees the solid embrace of EMV chip card technology, together with contactless PoS technology, it's strongly anticipated that a global adoption of contactless payment technologies is bound to occur within the next year (Paysafe, 2019).
3. 'Stablecoin' Makes Its Official Mark
Wells Fargo, the third largest bank in the U.S., makes an official plan to launch StableCoin in 2020, claiming the blockchain is "faster and more efficient than SWIFT," when completing internal money transfers across borders.
According to Blockdata, Stablecoin has the vast potential to minimize the price volatility that handling cryptocurrencies often brings, along with the unrivalled potential to be pegged to either a fiat currency or another asset of choice.
As the value of BitCoin continues to decline, having had a 30% downfall within just a year, StableCoin promises a long-term solution to the cryptocurriencies' market; serving as a liquidity platform for exchanging crypto, along with providing a stable and secure middle ground for crypto transactions.
4. Mobile Wallets are the Preferred Choice
If you're tired of carrying a wallet filled with credit cards and loyalty cards that you barely use, then you're sure to embrace the rise of Mobile-point-of-sale (mPOS) technologies.
According to Accenture, a striking 64% of consumers intend to employ a mobile wallet in the next year alone. At the same time, the demand for Mobile-point-of-sale (mPOS) technology is rapidly growing; Business Insider anticipates that by the year 2021, the industry will see over 27 million mPOS devices in use, which is more than nine times the amount of these devices in 2014.
Investopedia reports, the top three mobile wallets in 2019 are: Samsung Pay, Venmo, and eWallet, while the industry observes a substantial desire "to revolutionize the in-store checkout (Lost in Transaction: Payment Trends 2018, Paysafe)."
5. Biometric Authentication Is on the Rise
What was once a futuristic "concept" exploited in popular sci-fi films like Blade Runner (1982) and The Fifth Element (1997), has become a real-life and rapidly evolving technology.
Biometric authentication, a security process which determines a person's true identity based on their distinguished biological features, is set to significantly rise within the next few years with technologies such as facial recognition, retina scans, finger scans, iris recognition, vein patterns recognition, and voice identification, already transforming the payment industry.
Paving the way, China continues to integrate facial recognition throughout chain stores and self-service checkouts alike, prompting customers to checkout using this biometric authentication; and soon, the world is sure to follow. CB Insights reports, the future of payments will see biometrics replace a point-of-sale; there will no longer be a need for physical cards or manual data entry, this means will instead become a fingerprint or iris scan.
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