In the world of payments, it’s true that nothing stays the same for long.Innovations in technology, increasing customer demands and complying with new regulatory requirements keep merchants and those who accept and process payments firmly on their toes.
To help you succeed in this payment dance, the Direct Debit specialists at FastPay Ltd have put together the following list of 5 future payment trends. Discover what opportunities lie ahead and how you can stay in front of the (payments) curve as we move into the latter half of 2020.
5 future payment trends set to make it big
From ecommerce to instore, B2B to B2C, here’s five payment trends to watch:
1. Strong Customer Authentication (SCA)
PSD2, the Second Payment Services Directive will continue to be rolled out across Europe with enforcement of Strong Customer Authentication (SCA) regulations in the UK set to a revised deadline of 14th September 2021.
The SCA legislation has the potential to have a big impact on payment processing and how online merchants take payment. With the new rules, some transactions will require two-factor ID, adding an additional step to the checkout flow. All businesses should map their payment flows for SCA use cases and check with their Payment Services Provider (PSP) that they are able to facilitate SCA compliance.
Merchants must balance adherence to this new security measure with providing a convenient check out process. When similar legislation was enforced in India in 2014, businesses reported an overnight conversion drop of more than 25%.
2. Frictionless payments driven by Gen Z
Consumers will come to expect frictionless and invisible methods of payment that offer immediacy. Everything from mobile point of sale, transactions through smart speakers, increasing payment gateways to digital wallets is up for grabs in the race to satisfy user convenience and user experience predominantly led by the surge in GenZers.
That’s right, the naturally digital and tech-savvy Gen Z are 2020’s consumers. Although they may be known as the “see now, buy now” generation, Gen Z gravitates towards digital payment advisories more so than any other age demographic. They demand meaningful, relevant data from fintech apps such as amount due and due date. Businesses and merchants take note: it’s time to step up and deliver that next-level customer experience across your payment stack.
3. Digital invoicing
Consumers aren’t the only ones who want to ride the digital wave. Whilst by no means new, the digitalisation of the payment collection process involving everything from invoicing and account receivables is set to gather pace in the B2B industry, especially for SMBs. Companies are increasingly looking for payment processing partners who can offer a unified solution to simplify their payment management and allow them to get paid quickly whilst reducing overheads.
4. Biometric authentication
Think fingerprint scanners, facial recognition, heartbeat analysis and vein mapping. No; this is not some James Bond novel or spy film, this is the future of payment verification.
By using an individual’s biological and structural characteristics, biometric authentication as a payment method is said to offer accuracy, efficiency and security. Data suggests that by the year 2021, biometric transactions will account for 18 billion transactions yearly.
5. Fraud (and fraud detection) will evolve too
Changing payment trends will lead to innovation for the criminally minded. Organisations face the challenge of offering seamless user experiences whilst upholding the highest levels of data protection. Protective steps to safeguard information for all parties include the evolution of network tokenisation and the use of machine learning AI.
Get future ready now with Direct Debit
Whatever the future may hold, there’s one payment trend that is set to stand the test of time: Direct Debit. Trusted by millions worldwide and backed by the Direct Debit guarantee, adding Direct Debit into your payment collections mix offers numerous benefits. Both you as a business and your customers can enjoy peace of mind knowing that payments are taken care of automatically. This is a frictionless and seamless solution; this is cost-effective; this is secure and this is now.
Find out how FastPay can make Direct Debit work for you by getting in touch today.
Call 0161 737 5290 to speak with a friendly team member.
Alternatively, you can request more information about our range of Direct Debit solutions via our quick contact form.