Some recent factors affecting the payments industry are the increasing prominence of alternative payment methods and the growth and adjustment of the checkout experience to accommodate mobile payments. There is also the continued implementation of 3D secure and the increasing rush towards globalisation of online transactions and the severe risk of data breaches and fraud.
Seven predictions for the payments industry
The widespread adoption of new authentication methods needs to be ensured to enable a more secured payment environment. Risk will be reduced with new authentication technologies such as Apple Pay. It will be harder to commit fraud. The industry’s challenge will be to adopt new technologies and increase user acceptance. More of these authentication technologies will be introduced. It will be important to make this happen without reducing conversion rates.
The continued rise of mobile commerce will assist in the reduction of online payment risks. Mobile technology continues to provide more ways to authenticate players, for example by giving better Device ID.
Greater accountability and higher fines for non-compliance of anti-money laundering (AML) mean that payment companies need to focus on a robust know your customer (KYC) programme. Companies should be proactive in their approach, being equipped to know their customers at all times, not just at the on-boarding stage. Consequences of non-compliance are severe and rising, in 2014 the UK regulator alone issued £1.5 billion in fines, three times the amount of the previous year. Worldwide since 2013, financial institutions failing to meet AML rules for KYC have been fined more than $10 billion.
It will be a challenge to add certain new markets, with regulation and geopolitical issues in countries with unstable regimes, conflict zones etc. Payment providers need to be able to adapt their systems to accommodate local market positioning by providing systems that allow a single merchant to work with multiple locations and payment page designs to increase and maximise its conversion rate.
There should be more focus of Fintech within the industry and new payment methods to answer global needs. We need to see more new technologies that facilitate strong authentication entering the market, making online payments more secure is in the interest of all parties, shoppers and the retailers. Currently the environment is somewhat exposed and the industry needs a significant change such as the one which Chip and Pin brought to the card present environment.
We expect the trend of mergers and acquisitions to continue. Organic growth is not always possible at the rate that stakeholders expect, so we may see mergers of some payment players with larger companies.
Multi-channel checkout. Player demand for the ability to pay anywhere, anytime, via multiple channels continues to influence how transactions are performed, compelling merchants to provide the latest payment technologies.
SafeCharge International Group Limited is a global provider of payments services, technologies and risk management solutions for online and mobile businesses. The SafeCharge group has a diversified, blue chip client base and is a trusted payment partner for customers from various e-commerce verticals. SafeCharge has been Payment Card Industry Data Security Standard (“PCI-DSS”) Level 1 certified since 2007 and is listed on the London Stock Exchange AIM market (LSE: SCH). The Company’s wholly owned subsidiary, SafeCharge Limited, is an authorized Electronic Money Institution regulated by the Central Bank of Cyprus and a principal member of MasterCard Europe and Visa Europe. The SafeCharge group has operations in the UK, Cyprus, Bulgaria, Israel, Germany, Austria and Ireland. www.safecharge.com