Over the last decade, the way we pay has changed dramatically. Gone are the days when consumers had a handful of options when it comes to physical and online checkouts. Today, thanks to innovations across the board, we’re able to spend money in multiple ways.
Perhaps the most obvious sign of change is contactless payments. According to UK Finance, 2017 was the first time debit card payments overtook cash transactions in the UK. Looking at the data, consumers choose the debit card option 13.2 billion times, compared to cash for 13.1 billion. The driving force behind the change has been contactless payment options. By 2027, the average adult will make 22 contactless payments per month and, according to Barclay’s Adam Herson, many of these will be via mobile and wearable devices.
Of course, it’s not physical payments that have changed. The advent of Bitcoin has seen a surge in decentralised blockchains offering a new way for banks and businesses to process financial data. Put simply, the world around us is changing and that means it’s easier, quicker and safer to pay than ever. To give you a clearer idea of how our options are changing, here’s a rundown of the top five payment trends of 2018…
The Leading Payment Innovations from 2018
Mobile Payments: For end-consumers, this is most obvious innovation. Today, our smartphones are just as much of a debit/credit card as a communication device. As we’ve said, contactless payments are already popular for those that link their card to their mobile device. However, phones are also being used to pay in a different way. As payment processing expert at Top5casinosites.co.uk Sally Burns has noted, pay-by-phone options became the breakout star in gaming during 2018.
Although leading operators like 888casino and 32Red have long offered deposit options via their mobile apps, it’s only recently that payments have been directly linked to a user’s device. In practice, gamers can now charge deposits to their phone bill.
Because payments are charged to a user’s monthly bill/pay as you go credit, no bank details change hands. This, in turn, makes it almost impossible for a hacker to steal someone’s details and hack their bank account.
Biometric Payments:iPhone users are now used to unlocking their phone and replacing passwords with their fingerprints, but did you know you can now touch and pay? Thanks to improvements in biometric technology, it’s now easier and more cost efficient to offer fingerprint payment options. The technology itself has been around for a while. Indeed, in 2006, US company Pay By Touch authenticated $8 billion/£6 billion worth of transactions using people’s fingerprints.
In 2018, the trend has started to spread and, within the next few years, it’s set to become almost as common as contactless payments. On top of this, additional innovations such as retina scans are being trialled. In 2015, the Fujitsu Arrows NX F-04G smartphone featured one of the first eye scanners that could not only unlock the device but authorise payments. Although this technology isn’t as advanced as fingerprint scans, it’s coming.
Fintech and Bank Collaborations: The way banks operate is changing and it’s thanks to fintech companies. Although traditional values of risk management, infrastructure, regulations and capital have remained in place, fintech is streamlining the process. Indeed, when a major bank partners with a fintech firm, the latter typically focuses on cost reduction, data handling, customer experience and overall innovation.
The end result is a bank that retains its brand identity and trust but is more equipped to operate in a modern world. Indeed, with the advent of blockchain payments, banks are having to adapt in order to survive. This is where fintech companies are making the difference.
Blockchain: 2017 was the year when the world at large finally jumped on the crypto bandwagon. As the price of Bitcoin started to surge, everyone was scrambling to invest in all sorts of digital coins. Although blockchains have been around since 2009, the recent boom brought them into the spotlight and now every company out there is looking to implement blockchain technology. In simple terms, blockchains remove a central authority and process data in blocks.
Given the decentralised nature of the network, payments can be executed securely and without the need for third-party intervention. Although this technology is still being perfected, it’s already changing the way we pay. One of the most obvious benefits for companies is reduced costs. For consumers, anonymity and smaller processing fees are among the benefits to this new system of paying.
Data Science: The final area of change is payment data. Using data science, financial companies are now able to offer more protection against thing such as fraud and identity theft. According to Nathan Trousdell, Director of Strategy & Corporate Development at Payvision, data science is “multifaceted” process that takes into account a myriad of factors in order to improve a system.
In his mind, security is the most affected by data science. By using data to recognise patterns, it’s easier to spot instances of fraud. Beyond that, data can then be used to identify weak points in the payment process and then obscure information in such a way that it makes it tougher to commit crimes. Put simply, companies that process a lot of payments can use data analytics to find weaknesses in their system and, in turn, make it more secure for consumers.
Overall, 2018 has seen our payment options become more varied, more efficient and, importantly, more secure. Whether it’s using your phone bill to make deposits, companies processing data in a decentralised way or body parts authorising payments, there has never been a better way to pay. And, what’s more, things are only going to get better as we head towards the end of the decade.