|March 13th, 2020|
Thanks to the e-commerce boom, everything is available online now with a mouse click and the press of a button. Why bother to move out of your home when everything gets delivered to the doorstep these days? But that’s not what we’re discussing about. Merchant services, the ones which facilitate electronic payments processing from behind the scenes are undergoing changes. These changes are mostly seeping upwards from the consumer and sometimes downwards from fin-tech developments that keep revolutionizing the field of electronic payments processing. This post is about the future of merchant services and how merchants must prepare themselves for these trends.
Digital transactions have become popular because of their quickness and ease of operation. Cash has grown out of fashion being quickly replaced by evolving online payment processing systems. The future of online payments is clearly moving towards the adoption of technology. Currently, all digital payment innovations are circling around mobile technology, artificial intelligence and machine learning. As a result, more and more merchants are coming up with digital (voice) assistants, Internet of Things and multi-platform capable apps to make the process seamless. The future of merchant services is dotted with revamps and turnarounds, let’s peak a look.
1. Talk to Shop: Customers are inclining towards voice assistants to shop and pay online. The use of biometrics like fingerprint, facial scan, voice etc. makes transactions secure in case of card-not-present transactions. Wearable payment devices are also recording growing numbers of users.
2. Contactless Payments: Fintech like Near Field Communication (NFC) is already in use. In future, such technologies will catch up. Mobile wallets, smart cards are all examples of contactless payments which uses low radio frequency transmission to send/receive data.
3. User Experience & Convenience: User experience is paramount. Merchants should move towards a system that is fast, safe and easy so that users do not experience hindrance in payments. For a user, it must be swift in and swift out.
4. Multichannel Payments: Customers are using all the ways of payments out there which lays down a pre-requisite for the merchants to be ready to accept any kind of payments. Mobile POS (Point of sales) systems have broken down barriers to fast payments. Independent sales organizations (ISOs) have become free of payment processors with such fintech. Invisible, frictionless payments that hinder and delay the least are in demand.
5. Protection Against Frauds: As technology is developing, frauds and cyber-criminals are also learning along with these trends. Machine learning and AI algorithms read patterns and stay ahead of these threats by predicting anomalous behaviour. A prediction says that from 2018-2023, cyber criminals will siphon away a total of $130 billion by conducting online frauds in ‘card-not-present’ transactions. Theft of data, money, credentials is common.
6. Cryptocurrency Trends: Cryptocurrency and its backend technology ‘blockchain’ is getting a facelift soon. The fever has not died down yet, cryptocurrency is set to recover and reach its pedestal as one of the most secure method of digital payments. Merchants are building infrastructure to implement cryptocurrency models.
7. Leveraging Data: Data is everything, the merchants who cannot leverage data for their advantages will shrink and loose the opportunity to expand. Smart AI algorithms comb data to discover useful patterns that help in deciding the required strategy to modify the payment processing systems.
Besides all these, developing new standards and protocols for cross-border fund transfer, beefing up digital security, rewarding customers and use of other disruptive technologies will continue to gradually change and meta-morph the online payment mechanisms. Merchants have to be ready to reap the benefits of digitization. The changes are happening at a quick pace and it is very easy to fall back and get left behind.
The future of merchant services can be summed up with three simple terms: digital, mobile and secure. Merchants will be seen striving to achieve these three in the future and every financial technology rolling in will transform the way payment processing works.