Without a doubt, 2017 has been another momentous year for payments. In the UK, we’ve seen bitcoin soar to record values, and we’ve celebrated two significant birthdays: firstly, our beloved contactless cards turned 10 and secondly, we rejoiced at 50 years of using ATMs.
Most people can barely remember, or have never known, not having ATMs, or even contactless cards, and it’s a good reminder of how much consumer behaviours have moved on in the payments sector over the decades and still continue to evolve on a yearly basis.
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For me, there were three notable consumer trends to pay attention to in 2017:
Alternative payments have grown exponentially
One of the key trends we’ve seen this year has been the rapid adoption of alternative payments. According to our recent Lost in Transaction research, we know 89% of consumers are using mobile wallets more than they were two years ago, while a surprisingly high 11% of consumers have experimented with cryptocurrencies. With this new wave of innovative ways to pay, the industry has been posed with a dilemma: security vs convenience.
There’s a mismatch between consumers and merchants on the dreaded fraud issue
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By GlobalDataOur research also shows fraud awareness has continued to grow, which is illustrated by the 52% of UK consumers who told us they considered fraud an inevitable part of online shopping.
We’re also seeing a mismatch between consumer and merchant perceptions of how to handle the issue. 36% of merchants fear increasing fraud prevention measures will weaken the customer experience and cause consumers to abandon transactions, in reality, 56% of consumers tell us they would accept heightened security measures to avoid fraud. Going forward, the industry will need to address this divide.
The role of Big Data has been more fully recognised
As online payment adoption accelerates, merchants are becoming more aware of the role that data and analytics has in enhancing security processes and the overall customer experience, whether that’s identifying vulnerabilities or sticking points in the customer journey or expanding omnichannel capabilities securely.
Going into 2018, we can hope to see greater alignment between consumer and merchant attitudes to fraud, especially as new forms of fraud develop, and the implementation of more effective security measures.
For example, we’re likely to observe a proliferation in more two-factor and three-factor authentication methods and the roll-out of mainstream biometric authentication methods.
We’ll also continue to see more growth in alternative payments. The use of cryptocurrency is likely to take two to three years before it becomes mainstream but it’ll certainly continue to evolve next year and more people will experiment with it.
In 2018, the most successful merchants will be those who identify and embrace the plethora of payments opportunities that exist and take advantage of Big Data to improve their processes. The customer continues to be king, and has more places to shop and more payment methods than ever before. Building their complete trust will be key.
One thing for certain is that nothing stands still in this ever-evolving sector and 2018 promises to be another exciting year.
Oscar Nieboer is Chief Marketing Officer at Paysafe Group
