Mark Ranta, Head of Digital Banking Solutions at ACI Worldwide
As the first flakes start to fall and the smells in the air start to change, one of my favourite exercises of the Christmas season begins: looking ahead and wondering what next year may bring. Below are my eight key payments trends for 2018.
Mobile – The gift that keeps on giving
This is still my number one trend and has been for several years. In an industry that has been changing rapidly, this nifty little computer in your pocket has been at the centre of shifting consumer behaviour, and this year won’t be the one in which we say goodbye to this stalwart of the trend predictions. The mobile payment trend will continue to strengthen as we move ever closer to the cardless society.
Having spent the past 18 months in the shadow of PSD2,the General Data Protection Regulation (GDPR)will go into effect on 25 May 2018. GDPR will bring a heightened focus on data – who owns it and how to protect it. It is likely that next year’s conversations will be very much focused on authorisation, who can and cannot use personal data, and who should manage it.
PSD2, err 3?
Shortly after the last of the champagne is consumed and we kick off the new year, the Revised Payment Services Directive (PSD2) goes live in January 2018. Many questions surrounding the pending regulation remain, such as how will the new TPP market unfold? What will consumer demands look like? Which banks will become PISPs? Will this bring the GAFA into the fold? 2018 will start to unlock these secrets and we may learn what the Revised Revised Payment Services Directive (PSD3) may be focused on.
The term “cashless” gets thrown around a lot, however recent Generation Z findings show the trend towards a cashless Utopian existence may not be far off. We are beginning to see cashless markets appear in the Scandinavian countries and countries like India trying to create a more inclusive financial ecosystem. As more regions move towards a cashless society, we may also see more governments taking on cashless initiatives to help drive their economies into a new digital reality.
Facial recognition will lead us out of 2017 and into 2018, as the iPhone X moves away from the fingerprint and towards facial recognition software. This shift away from passwords and usernames and towards identity and digital identification processes will be at the heart of many biometric conversations in 2018. The evolution of biometric authentication will shy away from plastic, followed by a shift away from mobile. In time, it’s likely that we will not need a form factor other than ourselves to access our accounts.
While Pokemon Go is a phenomenon from last year, the augmented reality space is still very much a near-term trend. The ability to enhance user experience via your device is an exciting development, be that something as simple as booking a restaurant reservation through an in-app camera experience whilst standing in front of your chosen restaurant or food item in store. This space is likely to boom as we move further into the IoT value chain.
“Openness” will be at the heart of many discussions in 2018, focusing on the business decisions around Open strategies and how FIs will be able to monetise these strategies. .2017 was really the foundational layer for this trend and that theme will likely run throughout the next 20 years.
his trend. And while it may not have the decade-plus run as a top trend like our friend the mobile device, Open will be the foundational layer that the next 20 years of trends are built from.
You can’t have a discussion about banking without mentioning transformation, and whether It is likely that 2018 will see the first “big bang” results of the first transformation strategies. Large-scale savings on annual reports will start to show up and large scale project announcements will gain speed as the top regional banks join the multinationals in undertaking transformation projects.
The bonus trend – Partnerships
Large scale partnerships will help drive change in the New Payments Ecosystem in 2018 and the biggest target will likely be cross-border immediate payments. As more and more countries come online with their immediate payments schemes, the next step will be to achieve ubiquity via partnerships. 2018 will likely be the seed year for this trend to bloom.
I spoke to Colin Swain about the role of traditional banks post-PSD2 and Open Banking, the race between challengers and incumbents, and who is going to come out on-top.
I spoke to Garrett Cassidy, CEO and co-founder of Trezeo, about the gap in the financial market they aim to fill, and to get a better idea of how the agile mindset foresees the challenger vs. incumbent race to innovate playing out.
Bolt’s aim is to make the payment process easier for both consumers and merchants – consolidating every element of the payments process in one end-to-end platform, combining checkout, payment, and fraud detection systems.