By Bill Lodes, EVP of Business Development and Strategy, First American Payment Systems
Each year, payment technology continues to evolve and introduce new solutions that disrupt the payments industry. From advances with payment processing products like point-of-sale hardware and terminals to new technology and security products, many innovations have changed the current state of payments.
Each year generates new and improved payment products and solutions not only for consumers, but for merchants, VARs, and ISVs as well. It is important, then, to take a look at what the future holds for payments and what trends will develop or emerge within the next year.
- Progression Of Integrated Payments
Integrated payments provide a cost-effective and seamless way to incorporate payments processing within business applications. By integrating payments, software developers can offer value-added solutions that benefit their customers, making it easy to process payments directly in the software. Not only do integrated payments save time, they also help improve overall cash flow, allow customers to offer additional payment and billing options, and save money. Leveraging developer tools like REST APIs and testing environments, ISVs and developers can easily integrate various payment functionalities with just a snippet of code into their software.
- Increase Of Security Solutions
Security is an important component of payments. Today, there are many different ways personal data can become compromised. With data breaches and instances of fraud still occurring, 2017 will be a year with new security solutions becoming available.
As a component of enhanced security, EMV technology within the U.S. is expected to continue growing in demand as more payment players begin to incorporate EMV-capable solutions for their businesses. Tokenization and encryption technology are also projected to expand, helping keep credit card information safe and secure from hackers. As payments continue to advance, security solutions will also progress and become smarter and more robust throughout 2017.
- Rise Of Cloud-Based POS
Recent technological advancements have brought in new solutions that have helped create efficiency and stimulate sales for merchants. The demand for modernized POS software has produced cloud-based systems that have improved payment functionalities at a lower cost over older, traditional point-of-sale systems. Utilizing cloud-based POS systems has shown to boost overall revenue for merchants through features associated with cash management, reporting, and integrated loyalty programs. As 2017 transpires, more merchants will continue to convert to cloud-based POS over outdated hardware.
- Expansion Of Mobile Payment Acceptance
Like cloud-based POS, mobile payment acceptance is projected to expand in 2017 as consumers have shown a willingness to adapt to mobile payment methods. As that trend increases, more merchants are looking to incorporate solutions that are convenient and can be easily accessible, especially for businesses that may not have a brick-and-mortar location. That’s why tablets and accepting payments via a smartphone have grown. Not only are mobile payment options more flexible, they allow merchants to accept payments beyond a POS system and connect with consumers looking to use alternative payments. A 451 Research report forecasts mobile point-of-sale (mPOS) products will increase to 54 million units in 2019.
- Growth Of Payment Technology
Two technologies that have shown growth in payments are NFC and Bluetooth. NFC (Near Field Communication) technology not only works to process mobile wallet payments, but also is commonly used at vending machines, ticketing booths, and other payment kiosks. Since payments are becoming more digitally influenced, NFC technology will continue to grow in demand. Experts predict that by 2024 the NFC market will reach $47.43 billion.
With Apple doing away with the headphone jack for their latest iPhone 7 model, millions of consumers will now be using Bluetooth capabilities. As more consumers begin to incorporate Bluetooth, there will be more of an advantage in a mobile payments environment to add more solutions and products that work with Bluetooth technology. For instance, Google recently announced it is testing a new mobile payment app called Hands Free that uses Wi-Fi or Bluetooth to connect to a user’s smartphone for payment, allowing the user to remain “hands free” during a purchase.
- Increase Of On-Demand Service
Gone are the days of having to wait in line for products. More and more merchants, both retail and restaurant based, are learning consumers do not want to wait in line to purchase items. Instead, many are adding mobile apps, kiosks, or online ordering so consumers can buy what they want ahead of time and arrive with their item ready to be picked up. This on-demand service has already begun to improve the flow at quick service and fast and casual restaurants as well as major retailers. In fact, a study conducted by Big Market Research found that by 2022, the interactive kiosks market would expand to $2.88 billion.
2017 holds many opportunities for advanced technologies and new payment solutions. The progression of integrated payments will make it easier to process payments directly into software while advanced security solutions will continue to gain popularity. Cloud-based POS systems will also expand in usage and mobile payment acceptance will continue to gain momentum. Likewise, growth of payment technology and the increase of on-demand service are expected to become major trends. It is safe to say that 2017 will be a busy year as new payment trends, technology, and security lead the way.