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PaymentseNewsletter Winter 2019

As mentioned in the latest topic of Payments digitalisation end of last year, the sector is evolving to make the customer journey frictionless and yet compliant to the latest regulatory requirements. Security is a key concern, however, technology can address this, as presented in the Finextra report “Combating real-time payment fraud can be overcome with ML and AI-based solutions as they have the potential to deliver business benefits and operational efficiencies.”

With the latest developments, how is the payments landscape going to develop in 2019? According to The Financial Brand, there are seven trends that will reshape Financial institutions’ payments processes in 2019.

  1. The Big tech firms (GAFA: Google, Apple, Facebook and Amazon) are delivering faster and easier payment methods for clients. They are developing an evolving digital ecosystem. This is supported by the recent news on Google Payment Ireland receiving a license under the second Payment Services Directive (PSD2).
  2. As mentioned in Accenture’s report, the customer is looking for simple, convenient payment options. 2 out of 3 millennials prefer online banking and payments and even contactless transactions instead of visiting a store, according to BAI.
  3. Data is becoming the driving force to overcome competition since it provides information on consumer behaviour to tailor, upsell or cross-sell other services. GAFA are expected to utilise this further to gain market share. Advanced payment analytics allow for better KYC and CX as well as faster client onboarding. Partnering with the right Fintech provider can expedite the process to cross-check and analyse customer data.
  4. Mobile commerce with omni-channel payments is expected to increase in preference by most consumers especially those with available resources and limited time.
  5. Open Banking and APIs are key to future payments success, according to Capgemini. Agility becomes a key operative word for banks that see this as an opportunity to deliver more personalised and cross-device payment options, something also supported in Accenture’s report. Global dynamics are reshaping the market with real-time payments becoming a necessity for new-age consumers who want simpler processes and more control.
  6. Banking-as-a-platform, mentioned as “platformification” in The Financial Brand, "where the bank can become the platform to interconnect multiple participants to interact and create value” is an alternative. ”A cloud-based platform approach would allow traditional financial institutions to connect with Fintechs and other third parties to create consumer-payment solutions in a single ecosystem”, Capgemini explains.
  7. The mobile wallet evolution. Digital wallet payments continue to rise and especially in China, they account for 40% of in-person spending. This is expected to increase more than 160bn USD payments by 2022 according to eMarketer.

Furthermore, Fintech collaboration, innovative services, use of machine learning and new technologies should become inherent in financial institutions that want to be at the forefront of “emerging trends that may impact their business”, as mentioned in Deloitte’s study, on payment trends.

For Profile Software, actively involved in deploying new technologies and developing digital platforms to make payments faster, reliable, real-time with more than 250 API calls available, such changes have been anticipated, thus its Payments platform can be easily deployed to deliver competitive, seamless and automated processes with modern technology tools.

*Trademarks are the property of the respective owner.

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