Back in 2012, someone gazing into a crystal ball would have been hard put to accurately predict what would be occurring on the payments landscape just a decade later. For that matter, the task is challenging even for us, the people currently living in these tumultuous times. All the same, it’s both fun and instructive to guess at what will be happening this year and beyond in the world of payment processing.
A continued uptick in digital wallet payments.
Smartphones are everywhere, and customers are now embracing the safety, convenience, speed, and security of the payments they can make using their devices’ digital wallets. Why should Consumers carry a wallet stuffed with cash and cards when they can conduct their business efficiently with their phone? Since security is not sacrificed and convenience is key, this method of purchasing is sure to take over much of the payments mainstream.
Adoption of nontraditional payment types.
There was a time when cash, checks, and credit cards were the only options at the point of purchase. However, this is no longer the case. Merchant accounts and other payment processing providers are now offering point of sale equipment that is outfitted to do more. That includes options for recurring payments, buy now, pay later, and even cryptocurrency. Offering maximum choice and flexibility leads to higher satisfaction and conversion rates, a fact that is not lost on today’s retailers.
Increased use of AI.
Artificial intelligence (AI) has leapt out of science fiction books and into today’s retail space. In particular, ecommerce sellers are using automated chatbots to augment their human customer service capabilities. Although machines cannot answer every question or always provide nuanced information, they can serve as the first line of response, sending more complex questions along to a human expert to handle.
Heightened focus on cybersecurity in the payments arena.
As consumers become ever more comfortable with making online purchases, hackers are jumping at new opportunities for exploitation. In 2022, cybersecurity companies will be trotting out a full armada of the most advanced anti-hacker technologies, including data analytics, machine learning, artificial intelligence, and cloud-based applications. Additionally, there is sure to be a rise in the strength of federal regulations to fight back against ransomware, viruses, and denial of service attacks mounted by private and state-sponsored criminal actors.
Ongoing discussion of central bank digital currency (CBDC).
Although cryptocurrency appeals to a certain segment of the population, most consumers are more risk-averse and are reluctant to hitch their wagon to such a volatile star. By contrast, a digital dollar stablecoin or CBDC supported by the same, strong blockchain technology that undergirds Bitcoin and its ilk, the proposed CBDC could be exchanged between people or businesses around the world instantaneously and securely. With governmental backing, it would be reliable and stable, allowing for the bypassing of costly credit card fees. What remains is for the federal government to turn its bureaucratic wheels to work out the details and make it a reality. Although this will not fully come to pass in 2022, discussions continue.
As the above trends demonstrate, there is nothing static about the current payments landscape. Whether you are a business owner or a consumer, the upcoming months are sure to bring both incremental and fast-moving transformations. We can’t wait to see what’s next!
