By Vincent Ducrohet, Vice-President in charge of Strategy, Product, Offer Management and Marketing, Ingenico Enterprise Retail
The payments industry has been full of surprises and innovations ever since the invention of the first bank bill. It has faced many changes and challenges, as well as being impacted by the web, regulations, and globalisation of the markets.
We know the past but what about the future?What does the future hold for mCommerce and what evolutions will happen over the next few years? Furthermore, how will marketplaces grow? Analysts expect marketplaces to be the future of eCommerce.As for payment methods, which ones are going to prevail and in which countries? With that said, let’s take a closer look at what mobile payments will look like moving forward, and the key developments we have already seen along the way.
The impact of COVID-19 on mobile payments
We can’t comment on the state of play of payments without mentioning COVID-19. The current pandemic has completely interrupted the payments landscape and accelerated the shift towards online and mCommerce that was already taking place. This is partly because consumers are using less cash in response to the virus, and partly because many people have been staying indoors as much as possible. This has resulted in the rate of physical and in-store purchases dramatically decreasing and in turn, people shifting to online and mCommerce more than ever before.
However, the biggest impact COVID-19 has had is by forcing those consumers who were previously hesitant to use digital payments methods to get to grips with them. This has been especially intensified by the fact that typically those consumers less willing to use mobile payments have tended to be the older generations, who are those most likely to be isolating. As a result, it has encouraged them to try mobile and eCommerce to get the goods they need.
Will these consumers revert back to the payment methods they were using before, once this crisis is over? It seems unlikely, especially as they now will have experienced the convenience and simplicity mobile payments can bring to their lives.
The evolutions driving the growth of mobile payments
It’s worth noting that consumers have always wanted to buy everything, everywhere, in the easiest possible way. This is a trend that is not going anywhere, meaning retailers must continue to respond. Some already have, but many are still trying to catch up.
The most significant evolution to impact mobile payments is likely to be instant payments. In fact, it’s worth nothing that Europe is trying to have its own payment scheme based on instant payments – the Pan European Payment System Initiative (PEPSI).
As well as this, the launch of Amazon marketplace and services such as Uber and Deliveroo – all platforms that have given access to individual sellers and that also allow the sale of competitor products – have changed the course of retail with more seamless, invisible payments that take place on mobile. These evolutions have played a significant part in smartphones becoming more of a lifestyle product, on which you can do almost anything. So, as consumers become more and more reliant on their mobile devices for their daily routine, mobile payments are likely to become even more popular.
How mobile payments have helped the commerce sector
Thanks to the rise of digital payments methods, everything is getting easier for the user and easier for sellers in terms of products and services. However, as everything has moved towards digital forms of payments, we have gone from one payment method worldwide to 300 in 150 countries across the globe. As well as this, anyone can be a product seller on any marketplace.
So, while mobile and other digital payment methods have resulted in greater diversity, and generally sped up and streamlined the entire industry, making commerce accessible from inside people’s homes, merchants now need to find good solutions and good partners to ensure the options they’re providing remain competitive.
However, this must be balanced with security. In fact, the main obstacle when it comes to mobile payments is finding the right balance between a user experience and security with the least amount of friction.
With the Second Payment Services Directive (PSD2) deadline on the horizon, it is allowing new players to offer new services around payments which has added more constraints but has also opened the door to innovation and new players.
As long as merchants have the right partners on their side to help integrate these security initiatives into the payments experience, they are ensuring payments security for both merchants and consumers across all forms of electronic payments.
Technology – The key driver for mCommerce
The evolution of mCommerce is happening at different paces in different regions. For example, across Africa people are transitioning from cash to mobile payments in a single step, in contrast to Europe where payment trends went from cash to credit cards and then to mobile.
However, broadly speaking, mCommerce has taken a significant upwards turn over the last few years, since the launch of Apple Pay in 2014and as consumer access to smartphones and ever-faster internet has transformed purchasing habits.
The most significant driver behind this shift has been greater access to technology, from both consumers’ and merchants’ perspectives. Merchants can now accept all sorts of alternative payments methods while maintaining an extremely high standard of security, and with much greater speed and ease than ever before.
Merchants can be helped in accepting these by partnering with the right expertise with a global reach. As payments are different in each country, it’s important to have the right local expertise with a comprehensive understanding of local regulations, payment methods and specifications.
About the author
Vincent Ducrohet – Vice-President in charge of Strategy, Product, Offer Management and Marketing, Ingenico Enterprise Retail
Vincent Ducrohet leads the strategy of the Enterprise Retail business line, defines the full portfolio of products and offers for large merchants and drives the global marketing activities across the different geographies.
Vincent has over 15 years of marketing and business development experience, with fast growing technology driven companies in the electronic payments and retail industries. He joined Ingenico in 2011 and was appointed France Sales Director and Next Generation Offering Director before occupying his current position.