To remain relevant and retain their customers, businesses need to timely adopt innovative payment solutions. From this article, you will get to know which payment trends you should pay attention to.
The industry of online payments rapidly adopts new technologies and solutions. In this article, you will find a list of the most important trends that are shaping this sector right now. They are relevant for businesses of nearly any scale and sphere of activity. The companies that will respond to these trends quicker than their rivals will be able to expand their client base, increase the loyalty of their customers and maximize their revenue.
1. Payments Will Become Seamless and Invisible
The primary competitive edge of a payment system today is not the technology that it is based on — but the customer experience that it generates. Previously, the process of payment was always pronounced. You had to fill in a form with your private data and confirm the transaction to transfer the funds to the vendor. Today, these actions become excessive. You create an account in the system just once and it automatically deducts money from your card or e-wallet every time you use it. To be able to do it, apps need to feature embedded payment software — and this is one of the most significant trends in the industry.
2. We Will Be Able to Carry Out Payments Not Only Through the Apps
Smart automobiles are about to revolutionize our lives. And it seems that they will have embedded payments solutions. We will be able to pay for car rentals, gas and tolls without accessing our web wallets or using our bank cards in a conventional way. Later on, more and more industries will switch to the same approach too.
3. E-Commerce Will Be Growing on a Global Level
It is expected that by 2036, the volume of e-commerce worldwide will exceed offline retail. Because of the pandemic, this might happen even earlier. In 2019, every sixth purchase took place on the Internet and the growth of online retail was estimated as 20% annually. The main challenge for vendors today is to start selling their products abroad. To do so at the highest profit, they should enter into an alliance with payment providers.
4. Governments Will Strengthen the Regulation of the Payment Sphere
Their main goal is to support local businesses and protect customers. CCPA in California, the Wayfair Act in the U.S., GDPR and PSD2 in the EU — these are just a few examples of how legislative systems adapt to the new environment. Visa updated its free trial billing rules to enhance transparency — now, customers will not miss the moment when their trial period ends.
While consumers clearly benefit from these regulations, companies might find it challenging to take all the new rules and laws into account. This is why they should find partners among legal, tax and payment experts who would give them valuable advice and timely warn them about upcoming updates.
5. Businesses Will Strive to Simplify Their Payment Stack
On average, each company today relies on 4 acquiring banks and 5 gateway processors. Each of them has certain functions that others lack — for instance, the opportunity to transfer funds abroad with a reasonable fee or compatibility with a specific payment method. But such an abundance makes it difficult for companies to manage their accounts, carry out integrations, gather and analyze payment data.
To simplify their workflow, entrepreneurs might want to use Genome. This payment platform enables organizations to open several merchant accounts, transfer money globally and get a 360-degree view of their finance. The company can start accepting payments through Genome in 72 hours after signing up. Later on, as the business grows, the platform will scale to meet its demands.
6. Fraud-Prevention Solutions Become More Efficient and Elaborate
Data security is one of the most urgent issues today. Entrepreneurs should strive to obtain large bulks of fraud data that will deliver key business insights for them. Also, they should rely on AI in fraud prevention.
Fraudsters, for their part, are becoming smarter and more resourceful. To achieve their nefarious goals, they employ machine learning. It enables them to bypass outdated fraud detection systems thanks to applying such behavior patterns that are not identified as suspicious. AI spots fraudulent patterns at an early stage and uncovers anomalies long before they can do any harm to the organization. Plus, it accelerates the process of handling good orders, which leads to greater customer satisfaction and larger revenues for businesses.
The performance of fraud-detection systems depends on how large are the data storages that they operate with. When analyzing behavioral patterns, such systems compare them with the ones that are marked inside the storage as either “good” or “suspicious”. The broader the database, the more precise the conclusions. Companies can build digital identities for each client, based on their financial credentials, device fingerprinting, mobile phone number, email address and other relevant data. When they notice that the client tries to make a purchase but behaves abnormally, they will suspect a fraud attempt.
In addition to its main function, such an approach enables businesses to reveal hidden insights. For instance, it can help companies to detect their most loyal clients or the ones that spend the most funds on purchases. Vendors can target their goods or services directly at these customers, as well as spot and eliminate the problems that are connected with delivering the products to them. The creative use of fraud data will contribute to the overall growth of the business and will enable it to better cater to its target audience.
The above-listed trends make online payments easier and more enjoyable. But to integrate them, businesses need to invest in advanced technological solutions. If they cannot afford it, they should at least upgrade the ones that they already have or find partners that will help them to keep up with the progress. Consumers will become more and more demanding: bugs or friction caused by outdated systems might discourage them from making a purchase. Smooth payment experience, on the contrary, will inspire them for buying the goods or services of a particular company over and over again.