Responding to Innovation: Where will the impact be?
Payment innovation coupled with the pandemic's digitisation drive, is spurring card issuers to reinvent themselves. With the mushrooming options for consumers and merchants, it is challenging for issuers to navigate this landscape and know, with certainty, what the future will hold. It is crucial they get it right, however, since payments for banks and non-banks alike are a key touchpoint with the customer; they are the ‘in’ to a long-lasting - and profitable - relationship.
Issuers must adapt to the increased expectations of the customers, which have shifted since the pandemic. Buying behaviour fundamentally changed once lockdowns went into effect, with in-person purchases plummeting and online sales skyrocketing.
The pandemic gave the impetus that many needed to make the switch to contactless, and limits were increased.
The contactless trend is set to continue. In Asia contactless is more likely to take off in developed markets, whereas QR codes are expected to take off in emerging markets. These trends, of course, are an acceleration of a shift that was already underway. The dwindling of cash has long been documented, along with the steady increase in electronic payments. And for issuers keeping track of the various payment forms, there is growth expected across the many types in the years to come.
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