Ralf Gladis, CEO, payment services provider, Computop

Where once payments by voice, a tap on a screen or a nod of the head may have seemed the stuff of sci-fi movies, it’s quickly becoming a reality.  Companies around the globe and competing to transform shopping and payments as we know it.

From the Internet of Things (IoT) to virtual reality and cryptocurrencies, payments are poised to look a lot different in 2018 and beyond.

Following are my predictions for the future of payments:

The IoT will pay for our purchases

In the not-to-distant future, our devices will regularly process payments for us. In face some, like watches and phones, already do. However, larger devices will join the party. For example, cars will begin to automatically pay for fuel and parking fees, and smartphones will be a universal tool to buy and pay everywhere.

To make this a success, the payment process behind these transactions will need to be silent, smooth and automatic.  Those payment methods that support this kind of transaction will be the ones that win. And those stand to be the established payment brands that consumers already trust since handing over payment to devices requires a big change in consumer behaviour.

Reality as we know it will change

It’s clear that virtual reality is poised to become a new sales channel.  But, businesses, and the payments environment supporting them, will need to transform in order to offer safe and easy-to-use virtual shopping experiences for customers.

Industry sectors like retail, hospitality and leisure will continue to seek ways to leverage virtual and augmented reality to commoditise virtual worlds, bringing visual representations of goods more in line with their physical reality.  This will prove particularly successful for mail-order and e-commerce companies, especially for those that offer simplified payment processes. We’ll see more one-click buttons, and companies placing them in the shopping cart or at item level. This benefits both the company and the customer, as the payment process becomes both innovative and easier, bolstering conversions.

Biometrics will continue to grow, along with the security surrounding it

We’re currently experiencing usernames and passwords being replaced with biometric authentication like fingerprint, face and voice recognition – and this technology is evolving all the time.  What’s key is that it will become faster, more secure and more reliable. We can’t lose a fingerprint, and it won’t be necessary to type in complex passwords on small touch screens anymore.  This is very appealing to consumers, but there will need to be a continued focus on security to ensure data is not breached.

Cryptocurrencieswon’t become mainstream in the near future

While cryptocurrencies have been around for a while, they have not been successful in business-to-consumer payments due to their negative perception, including a lack of trust and convenience.  Cryptocurrencies like Bitcoin could build trust if they were regulated and anonymity was replaced by trustworthy relationships with consumers.  But, that’s contradictory to what Bitcoin stands for the present time.  As a result, cryptocurrencies likely won’t become very popular with consumers, at least not for another decade or so.

Cash will not go away, at least not yet

There’s been much talk about a cashless society – but we’re not going to get there in the immediate future.  Electronic payments require trust in data privacy because consumers can be tracked.  While the popularity of things like bank accounts for payments is growing thanks to Faster Payments in the US and UK and Instant Payments in Europe, consumer trust in the privacy of their data will continue to lack.  Until that trust is completely established, it will be impossible to replace cash altogether, especially in markets where people mistrust their banks and their governments, like Germany and Italy, for example.  As long as consumers think there’s a possibility that their privacy could be infringed, it will be impossible to establish a cashless society.

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