My blog last week covered New Payment Trends that I expect to become established this year.
This week I focus on Growing Payment trends, those that are already evident and likely to strengthen in 2018.
- Propositions using PSD2-compliant APIs will appear gradually. Expect bank and Fintech applications such as account aggregation and personal financial management/analytics to appear in the first half of 2018; followed by retailer and Retailtech applications
for account-to-account payments, account information and retailer analytics in the second half
- Mobile wallets from China already accepted by many retailers in Europe (using QR codes at POS) for Chinese nationals, will take advantage of PSD2 account access to launch services targeted at European consumers
- Wearables for payments will start proliferating with new devices and fashion accessories created by accessory, consumer electronics and fashion-wear companies, using bank APIs for account payments (PSD2) and processor APIs for cards
- National infrastructure renewal programmes will appear in many countries around the world, for real time domestic payments and RTGS wholesale payments
- Real time payments adoption in Europe and the US will be slow, using infrastructures launched in 2017. While a large number of banks will implement the technology required and connect to the new real time central infrastructures, volumes will remain
low (compared to same day/next day payment volumes) until at least 2019. Few banking communities will force migration to real-time payments, while consumers and corporates will take time (several years) to adopt them at scale
- Some banks will start building cloud payment solutions as an alternative to on-premise technology
- Request–to–pay as a messaging system for invoicing and a payment method where the consumer is in full control of the payment will emerge as an exciting new way to pay in several countries, with the UK among the leaders (through the New Payments Architecture)
- Although most banks will still ignore Bitcoin, expect to see cash management products appear from bolder banks and from Fintechs, aimed at corporate treasurers, using Bitcoin and Ethereum
- Ethereum will grow rapidly in popularity, its market cap will exceed Bitcoin's by year end, reflected in the hashing power of the Ethereum network which will be at least 10 x greater on average in 2018 than it was in 2017
- Ripple's network for cross-border payments will grow significantly, attracting a growing number of banks and corporates, creating a positive network effect generating rising transaction volumes.
These growing trends are established and point to a new fabric for the global payments industry. A fabric which is more decentralised, which enables immediate fulfillment and which will grow through positive network effects.
Next week, my third and final blog in this series on payment trends, focuses on the ongoing payment trends, those that are already strongly established and which will continue in 2018.