In 2020, the payment technology landscape is set to become increasingly digitised, more focused on the customer experience than ever before, and progressively cross-border efficient, as the digital-first generation hits its prime spending years and the vast majority morph into cashless consumers. Cash is quickly losing ground to plastic and electronic payment methods: in the UK, only 34 percent of payments were made in cash in 2018, according to UK Finance, with debit cards overtaking cash as the most popular payment method the year prior. But as the payments universe expands and as governments grow their support for financial inclusion by promoting non-cash payments, the payments technology world is moving closer towards becoming a unified, centralised, open ecosystem – one that puts user convenience and the customer experience first.
Be it through enhanced security for card users, more efficient ways to pay for products or services or the shift towards an invisible, frictionless payment experience, customer experience (CX) will be without doubt the prime competitive differentiator in 2020. Banks, card firms, BigTechs, FinTechs, and other players are constantly developing new technology to make the CX seamless, and in many instances customers won’t even have to input their information to pay over the coming 12 months. Uber is the first to implement this ‘invisible’ payment transaction, by keeping customers’ information on file and simply charging them automatically at the end of every ride or delivery, not even using the word “buy” to initiate the transaction. This ‘eWallet’ experience will define the future of cashless payments, starting now, while biometrics could also possibly take centre stage in payment technologies over the coming decade. In 2019, we saw the first ever biometric fingerprint credit card issued by a British bank, and as payment providers look to increase security measures in response to the increasing sophistication of fraud tactics, biometrics data is going to become even more integral to the payments process. Already, smartphone providers and app developers have embraced facial recognition and fingerprint technology, and 2020 will see more and more solutions that offer multi-biometric identification payment technologies among them.
While we’re on the topic of security, the increasing abilities of fraudsters and hackers will be a hot-button topic in 2020, forcing non-traditional payment providers to take innovative and extensive measures to protect consumer data. The simple truth is, fraudsters are getting smarter, and balancing CX with data security is going to be a critical challenge for payment providers this year. Thankfully, they too are becoming smarter: payment solution providers have begun to experiment with the use of artificial intelligence (AI) in fraud prevention.
As experts will attest to, financial fraud is becoming increasingly complex and fraudsters are now relying on machine learning to bypass security solutions and execute cybercrime. Outdated fraud detection systems are no longer cutting it, but by contrast AI-driven approaches can detect fraud by uncovering anomalies, while satisfying businesses needs at the same time – something that cutting edge, fast growing fintech payments issuer, processor and programme manager EML is prepared for. Over the next 12 months, it’s thought AI will become absolutely integral to fraud risk management for business.
EML Payments, a market leader in global payment solutions, has garnered a reputation in compliance and anti-fraud technology and manages more than 1,400 programs across 23 countries in North America, Europe and Australia. Among the Brisbane-based company’s payouts, gifts, incentives and rewards and supplier payment solutions are its highly secure mobile and virtual cards – proven to be more effective in terms of fraud protection since each card is only good for a specific payment, and they are sent directly to the email address confirmed in the enrolment process.
While CX and fraud prevention will become much more important in 2020, companies will have to respond to increasingly complex regulations on data protection and payment usage at the same time. The GDPR in the EU and the CCPA in California have paved a path that will very shortly be followed by other jurisdictions – and the implications on data usage and consumer protection will be enormous. It won’t just be the financial services industry that will feel the impact: a huge number of industries will need to think very seriously about how they interact with data, and the ramifications of not doing so will be extreme.
Perhaps the most significant change we will see in the payment technology space in the year ahead is that the digital-first generation will comprise the majority of spenders, in the U.S. at least. Marketers have been targeting the younger generations for a few years now, but in 2020, millennials and Gen Z will truly hit their stride in terms of spending power. What this means is that more money will be transacted via non-traditional payment methods than ever before, and to keep up with the demands of this massive group of consumers, businesses will need to innovate and become fully digital so as to appeal to these big-spenders – or risk falling very far behind.