6 challenges for payments in 2017
6 challenges for payments in 2017
Operators wanting an insight into the likely trends in the payments market this year will do well to visit ECommPay at ICE. The company has identified a series of challenges facing the industry this year, not least the long heralded adoption of m-Commerce.
ECommPay, which has just appointed e-payments industry insider Paul Marcantonio as Head of UK and Western Europe to push growth across those markets and build upon existing relationships, has identified six areas to watch in 2017:
- Anti-fraud payments
- Continued innovation
Nikita Mishchenko, head of product development at ECommPay, explained that transaction volumes in the online payment market reached $1.47 trillion in 2014, growing to $1.7 trillion the following year and are predicted to reach $2.7 trillion by 2019. She says that the upward trajectory e-Commerce payments have enjoyed is due in large part to the growing popularity of mobile commerce. m-Commerce, as it is commonly known, took 40% of the market share, rising up to 60% in countries with higher rates of mobile coverage.
He added: “Handheld devices have rapidly become indispensable to the modern consumer. Mobile phones and tablets can store vast quantities of information, tailored to user specifications through a number of carefully selected applications. ECommPay studies have found that roughly 30% of all electronic transactions are made using handheld devices. Email marketing generates 26.7% of total sales volume via mobile phones and 23.1% via tablet, with personal computers trailing behind with 20.9% of the market share.
“Leading fashion retailers have been quick to adapt to consumer trends, introducing increasingly complex and powerful technology for mobile monetisation. New payment technologies, products, and solutions promise to improve the transparency and predictability of payments, reducing obstacles and increasing revenues.”
On the multi-channel issue its been clear that as cash is giving way to online payments, mobile applications have become the new arena for both online and in-store shopping.
Mishchenko said that recent trends, such as multichannel shopping, which allows consumers to connect, browse, and engage with brands and retailers across a number of platforms, have provided the much-needed prompt for merchants to dedicate time and effort in constructing a seamless consumer experience.
“Brand apps designed to study customer behaviour and purchase history, mining valuable data for targeted advertising leads, have flooded the market. Consumers create personal accounts, which store a variety of information and preferences, enabling the automation and personalisation of payments, which can be initiated anytime, anywhere, with virtually no geographic boundaries.”
It is a similar situation for Omnichannel payments according to Mishchenko: “The multichannel approach necessitates an omnichannel payment strategy to meet consumer demand for payments structured around their lives and specifications. Merchants implementing omnichannel payments receive a single solution for the various channels they employ, streamlining the payment process for customers.”
Connecting additional channels into a unified payment gateway increases the risk of fraud and data breaches, driving payment service providers to increase investments into security and authentication measures. To eliminate fraud, payment firms and merchants adopt a range of solutions, each of which has its own benefits and drawbacks, depending on company size, transaction volume, etc.
- PCI-DSS compliance significantly decreases the rate of security breaches.
- EMV implementation minimizes fraud incidence, especially in Card-Not-Present transactions.
- While Chip and Pin authentication improves the security of Card-Present transactions, solutions such as 3D Secure offer additional security features for Card-Not-Present transactions, thereby reducing the risk of fraudulent transactions.
- End-to-end encryption and tokenization processes provide additional protection during the transmission of sensitive data.
- Geolocation tracking and mobile secure location services provide customer information to fight fraud in real-time.
- Biometric features are at the beta stage, with MasterCard testing facial recognition technology to authorize transactions.
There are those that think the alternative payment systems offered by Cryptocurrencies are a safer alternative to traditional payment methods. Blockchain, the leading digital currency, is growing at incredible rates, with more than $1.46 trillion in circulation as of June 2016. The permissionless, distributed database technology for managing and recording transactions could help banks optimize the payment process and cut costs.
Mishchenko commented: “Interest in blockchain technologies is shared across multiple stakeholders, including banks, non-banks, and fintech firms. Significantly reducing the time and costs associated with clearing, custody, and settlement, Blockchain promises significant improvement and transparency in cash management processes.”
As for future development, he added: “The leading trends of 2016, from advanced security features to blockchain technologies to a streamlined consumer experience, have paved the way for future innovation. Though not all the trends outlined above are relevant for every payment service provider, familiarity with the newest technologies and solutions is a necessary condition for success in the payment market. Developing every aspect of the payment process across various e-Commerce sectors and settings, payment services providers must keep abreast of the latest trends to anticipate changes and meet client requirements.”
Meet Paul Marcantonio and Nikita Mishchenko at ECommPay's Stand N7-415 at ICE Totally Gaming from 7th to 9th February at the ExCel, London.