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
Slam the Brakes on Gas Pump Fraud and Rental Car Scams This Memorial Day Weekend
The process of secretly reading data off credit and debit cards (aka skimming) could be netting criminals as much as $3 billion a year in the US, according to Bankinfosecurity.com.
As we look forward to Memorial Day weekend here in the U.S., travelers are getting ready for road trips to their favorite destinations. Whether it’s a beach party in Miami, snorkeling in Catalina Island, or even a staycation, payments – and more specifically, payment fraud – is a huge consideration for travelers, especially during the holiday weekend. I sat down with one of our payments fraud experts, Seth Ruden, to talk about what travelers must look out for regarding payment fraud and how they can keep their money safe. Here’s what he told me.
Cutting the Cost and Complexity of Merchant Payments – But Not the Customer Experience
New research from ACI and Ovum, released this week, highlights that many merchants in 2018 are investing in creating operational efficiencies in their payments systems. But the question is, as they strive to simplify systems and cut costs, will customer experience suffer?
Despite the Hype, Machine Learning, Models, Behavioral Profiling and the Customer Experience are Still Fundamental
Think about the last time you got a fraud decline. Where were you? In the grocery store? Buying airline tickets? On holiday? Shopping in the same place you’ve been a dozen times, but across the border? How frustrating was that, what did it do to your perspective, your mood, your confidence in your financial institution? This can be embarrassing and inconvenient, stressful and alarming for the consumer. There are few things that can be more disruptive in our day-to-day lives then the lack of access to your funds, or the care taken by your financial institution after a fraud occurs. According to ACI’s Global Consumer Fraud Survey, 20% of people may decide this is too much and move along to another financial institution.
Cross-Border eCommerce Expansion: A Fraud Perspective
For merchants that are expanding their online presence overseas, enabling the right locally-preferred alternative payment methods and connecting to local acquirers can be a critical determinant of success. But without considering fraud management strategy in tandem with payments strategy, the road to cross-border success could be a bumpy (not to mention costly) one.
The 12 Biggest Security Threats to Payments
Consumers ask a lot of you in terms of convenience, speed and, above all, security. This puts the pressure on you to offer a pain-free consumer experience that is also highly secure. And when you accept payments, you need to secure all parts of your organization. Here’s an actual example: one major breach occurred when an air conditioning vendor was hacked, allowing hackers to access the corporate network and finally the point of sale network. This highlights the importance of understanding the threat landscape we face today.
Maintain Vs. Invest: What the Digital Era Ushers in for Banks
Taking place this week in Brussels, the European Credit Research Institute (ECRI) will host a high-level debate on how policymakers can build on the process of digitalisation of banks to raise competitiveness in light of increased competition from fintech start-ups and tech giants.
Ursinus College: The Future of Campus Commerce is in the Cloud
Sixty-eight percent of schools are moving eCommerce to the cloudi. As Ellucian Live begins to descend upon San Diego this week, ACI’s Gene Scriven took a moment to chat with Ellen Curcio, Director of Student Accounts at Ursinus College, about the future of campus commerce.
Be sure to catch Ellen and Gene, as well as ACI partner and host Ellucian at the event on Wednesday, April 11, for a panel discussion on “The Future of eCommerce in the Cloud.”
Fraud Awareness Month Canada
A couple years ago, I penned a blog post to commend the Canadians on what made their culture so resilient to fraud that it developed the lowest fraud rates in the Northern Hemisphere. It got a bit of circulation and created significant positive feedback. This time, I would like to bring awareness back to Canada about a potential threat as it relates to the increasingly popular Tap payment channel.
Telcos Have a Unique Opportunity to Drive Mobile Payments
We are witnessing a significant and inevitable shift in digital payments towards mobile commerce. In the next ten years, we will see an exponential expansion in the number of devices and applications we will use to make mobile payments. You could pay for your groceries on your mobile, for delivery at home, then two days later receive a message from your fridge alerting you that the milk is running low. By the time you get back home, a new bottle of milk could be waiting for you, thanks to real-time delivery, even by a drone.
Securely Growing Online Sales in 2018: An Australian Perspective
Back in November 2017, I participated in a panel discussion for NORA (National Online Retail Association), where I looked at fraud trends in Australia over the previous holiday shopping season and made predictions to help retailers prepare. Now looking back, I am sorry to say that my predictions were painfully accurate.