IoT, Blockchain, Predictive Analytics and Voice First: 2017 Payments Predictions
Well, my predictions last year of blockchain, millennials and SaaS will dominate payments was partly true. I missed millennials, I overstated the impact millennials, particularly millennial business owners, would have on the payments. The desires and needs of millennials (e.g. faster processing, mobile first, contextual offers) are built into the roadmaps of providers. Blockchain and SaaS dominated many headlines and will continue to do so. My predictions to stay relevant this year – IoT, Blockchain (with a twist), Predictive Analytics and Voice First.
Internet of Things (IoT): Every connected device will enable commerce.
This was seen as a fantasy only two years ago. Think about Amazon's "Dash" button and how easy it is to re-order items. Or, think of ordering pizza using an emoji on Twitter with Domino’s Pizza. These two scenarios were laughed at several years ago. Although they are not mainstream today, one day they will be as familiar as using a credit card. The reason? The number of connected devices is 10 billion today, in 2020 there will be 50 billion. Once radical ideas of self-ordering refrigerators are no longer science fiction. They are in the early adopter stage of the innovation life cycle and will be mainstream soon. I may be at risk of having another “millennial moment” like last year as the early indications from the Consumer Electronics Show demonstrate IoT is here. The item not widely discussed is the fraud implication and how easy it is to hack these devices and how consumers may not notice several small <$5 charges.
Blockchain: The hype is over
The twist with blockchain is that it has reached peak hype in financial services and the focus will be on retailers and the supply chain. I think we will see many VCs write down their investment or exit the space and the classic “trough of disillusionment” will take place. Late in 2017 we will see practical deployments of blockchain technology in financial services. For retailers this is not just an alternative payment in the form of virtual currency Bitcoin, its impact touches many aspects of retailing. It is widely talked about solving complex supply chain issues and the tracking of goods to ensure they are not stolen or counterfeit. Consumers will be able to understand exactly where their food comes from (e.g. responsibly sourced fish or organic fruit) and retailers will be able to demonstrate the authenticity of high value goods.
Predictive Analytics: Needed to combat new challenges
With the increase in connected devices, coupled with an increasingly complex payments ecosystem, new challenges arise. It’s not uncommon for consumers to wave their phone to buy a cup of coffee, use one click to purchase clothing at an online retailer or quickly split a bar tab. Enter analytics. Fraudsters sense opportunity in changing and dynamic times. Merchants must implement a multi-faceted approach to fraud detection and fraud prevention — and that means integrating predictive analytics into the traditional rules-based mix for a blended and balanced capability. Using “big data” predictive analytics automatically sift through huge quantities of financial and non-financial data to quickly and efficiently uncover anomalous patterns indicative of fraud — many of which may go undetected by rules-only-based systems or certainly by human analysts alone.
Voice First Interface: Delivered by banks
With the growth in new voice command technologies (e.g. Amazon Echo/Alexa and Apple's Siri) people are becoming more comfortable talking to technology. Sadly, my young children who can't read or write can search YouTube through visuals and importantly through voice command for their favorite shows. This is the future. When I ask Siri to show me my bank balance she responds with "You can find that on your banking app, would you like to open it?" How long until the voice command is integrated within the banking and payment apps. "Siri, send my kids $20." Or “Alexa, what’s my bank balance?”
SaaS: The footprint continues
“Where did SaaS go?” may ask. The answer is, nowhere! I think SaaS is huge and getting bigger, but it here, now and not much of a prediction. I would love to start a conversation about IoT, the reality of blockchain, fraud analytics and voice first interfaces.
Wishing you a happy and successful 2017.
Related Blog Posts
APIs and Cash Management (Harnessing the Hammer, Part 2)
In my last blog post, we talked about the hammer and the nail; the hammer in this case being open APIs, and the nail being the market need to adapt to changes in customer behavior and expectations from our commercial market. We laid out why the US is in a different position when it comes to open APIs—it has to do entirely with the regulatory environment, which is allowing us to start with the largest revenue opportunity first. Finally, we challenged you, the reader, on how you can begin on your journey. And that is where we are going to pick things up. What steps can you take today, and what use cases can you explore as we start getting our hands dirty?
Three Key Takeaways from the Latest Payments Insight Survey
Blinkist is a reading app that summarizes books into 15-20 minute reads; these reads are called “blinks.” It’s helpful for a few reasons – I can scan books before I purchase them, I can get new ideas without having to read the full book, and I can learn to summarize information. It’s safe to say that I (and probably many who are strapped for time) are a little obsessed with Blinkist! So here I present my own summary – in three key takeaways – of the new ‘2018 Global Payments Insight Survey: Retail Banking,’ which finds that 51% of banks are increasing spend on payment technology.
The Hidden Cost of Digital Payments for Retail Payment Players
It is not exactly breaking news that non-cash payments are on the rise globally, with column inches dedicated to the launch of digital financial-inclusion projects. But going cashless is not only a challenge for humanitarian endeavors, or developing countries. We all agree that removing cash from the system will save payments players big bucks in the future, but we must also consider the immediate impact of digital transformation on the legacy infrastructure of the powerhouses of the payments ecosystem.
Why User Engagement Matters, Even for Enterprise Applications
As a User Experience Designer at ACI, I spend a lot of time watching users interact with my designs. I need to make sure our solutions work properly, but lately I’m more interested in how they make my users feel. Engagement is a dominant concept in user interface design right now. It’s important because positive emotional experiences often lead to increased use and loyalty.
Five Payments Trends to Watch in 2018 [Part 1]
2018 is set to be a year of rapid change and new challenges for payments players. The floodgates are opening with PSD2 and UK Open Banking coming into force, bringing an onslaught of new competitors and potential partners. Whether evolution is mandated or market-driven, banks and processors are facing a critical year in their long-term success.
Five Payments Trends to Watch in 2018 [Part 2]
The New Payments Ecosystem Is Here. The floodgates are opening with PSD2 and UK Open Banking coming into force, bringing an onslaught of new competitors and potential partners. Whether evolution is mandated or market-driven, banks and processors are facing a critical year in their long-term success.
Open Banking Goes Live: The Walls Around Traditional ‘Old Style Banking’ Are Crumbling Down
January 13, 2018 may well be remembered as the ‘beginning of the end’ of the traditional retail banking industry.
Thanks to a profound set of new rules by European regulators and the UK government, we may see the start of an era where consumers no longer hesitate to change their bank accounts or make more personalized arrangements with regards to their finances.
The Bank of the Future: 2040 and the Reality of Ar and Vr
Mark, when I envision the bank of the future, I imagine Twiki and Buck Rogers at a casino. Or maybe I once dreamed that—I’m old and my mind is going. So what are we talking about and what can we envision when it comes to the bank of the future? And by future, I’m talking about 2040, before certain cities might be flooded (by water). But I digress, as this isn’t a post about climate change.
How 'Mega Trends' Are Shaping Payments in India
In a previous blog post, I wrote about the impact of demonetization in India and the staggering growth of new digital payment types. Building further on this, I want explore some of the “mega trends” in payments, and how India is embracing the opportunities presented by these trends.
One Year Later: How Demonetization Has Impacted India
This month marks the first anniversary of demonetization in India, and it has undoubtedly changed the country forever. When I visit India, I increasingly see micro-transactions conducted via mobile phones. Cash is still used, but I see less and less of it with each visit. We are in the middle of a true paradigm shift – and India is poised to become a global leader in new types of payment acceptance.