The Financial services and Payment industry are constantly changing and evolving. In the past couple of decades alone, we have seen the payments world transform rapidly with the rise of eCommerce, mobile transactions, and many more innovations that has revolutionized the way businesses process payments. It is a trend that will continue well into 2020 and beyond. As there are many trends to watch that are happening in the world of payments, the REPAY team has made it easy for you to understand the top 2020 payment trends coming your way!
The top 8 trends in payment processing for 2020
Mergers and consolidation of large companies, card brands, processors, and banks has become much more common in recent years. The mergers are done to help the companies expand their reach across the globe. Some are merging to expand the services and capabilities of the two companies into one larger and stronger company, and others take advantage of economies of scale to corner their particular market. In 2019 alone we saw Fidelity and Worldpay merge together, Fiserv bought First Data, and Global Payments announced they would acquire Total System Services. These are just a few of the mergers that are currently shaping the payments industry. It is still too early to know what outcomes for merchants will come from these mergers; what looks the most likely is more consolidation and more mergers in the near future.
Mobile phone payments have been a phenomenon in recent years and this is expected to grow even larger in 2020. As mobile payments grow in popularity, it is important to know what a mobile payment is: any payment done from your phone or tablet. Some examples include: the wallet on your iPhone, apps with a payment feature such as the Starbucks app, and any SMS text payments. Mobile payments as a segment is growing so big that BI Mobile Payments report shows mobile payments are forecasted to grow from $75 billion in 2016, to a little over $500 billion in 2020, which would be the biggest year on record.
Consumers and businesses want more from their credit cards - they want rewards! More and more consumers are saying that they will switch credit cards if it means they get more rewards for the same transactions and use. Payment players have a chance to capitalize on this trend by delivering more rewards to their consumers and by meeting the needs and lifestyles of their consumers. Unfortunately, rewards cards are often more expensive for merchants to accept. Cash discounting programs can help mitigate these increased costs. In order to set up a cash discount program in a fully compliant and legal way, merchants should consult with payment processing experts that they trust.
Robust security using AI
As retailers fight for consumers short attention spans, the incentives for quick, effortless payments increases but also the risk of fraud. Many times, merchants are more focused on closing sales that they do not realize that their systems are not properly protected and secured. As eCommerce continues to grow so does targeted attacks and risk of fraud. This is why many companies are adopting Artificial Intelligence into their integrated software solutions to scan or find fraudulent payments and enhance their payment optimization. Artificial Intelligence can usually be integrated into the gateways provided by payment processors to help the processor (and therefore, merchant) catch fraud quick and early.
Contactless Payments is another way payments are reacting to modern demands. Contactless payments is a method to buy products with a debit, credit, or smartcard by using FRID technology or near-field communication (NFC) to complete a transaction. It works just like swiping but instead you just tap your card near a POS system and the transaction is approved or declined; no pin number and no signature required for your payments. It is sometimes safer and more secure for the cardholder and the merchant than outdated systems; while not perfect, it is yet another trend aimed at ending fraud and keeping the consumer safe and happy.
B2B Digital Payments
Business-to-business (B2B) payments accounted for $38 trillion in 2018, and a lot of those transactions are still done by outdated paper checks. The disadvantage to a merchant is manyfold. Paper checks are slower to process, result in lost invoices, and accrue in postage fees and check fees. B2B payments have been trending towards digital payments for many years. In 2020, we expect a large transition from paper to digital for B2B billing for small and medium sized businesses. Accepting digital payments for B2B transactions is not only a smart business decision but it can be the one that saves your business money. B2B processing might actually be cheaper than you might think due to benefits of Level 3 credit card processing when you go with a payment processor that offers Interchange Plus Pricing. Interchange Plus Pricing plans pass the interchange costs directly onto you with a fixed and transparent markup. Thus, saving you money over a flat rate or tiered rate pricing plan. Leave the checks and cash behind with B2B digital payments, which includes methods of ACH payments and online credit and debit card payments.
Recently, many wholesale/mfg/distributors have been launching eCommerce platforms to grow their business and bring the companies up to date. Many are adopting eCommerce platforms like BigCommerce, Magento, WooCommerce, and PrestaShop (all of which REPAY integrates into!), and having the eCommerce platforms integrated with back-end ERP solutions helps streamline the payments process! If distributors are not maximizing the use of Level 3 payments, they are leaving money on the table which cuts into their bottom line. The collection process in a wholesale environment has become much more difficult, platforms like REPAY ClickToPay make payments a breeze and help customers pay their invoices quickly, securely, and easily.
As business gets more complex businesses, busy merchants are looking for ways to process payments faster and spend more time focusing on growing their business. Faster payments is one of the most sought after trends coming in 2020. Same Day ACH (SDA) is an example of a faster payment. SDA transactions are processed in one single business day whereas ACH transactions before could take up to three business days to process. Many companies are going to have to invest in new equipment and technology to avoid the risk of a bottlenecked system. This upfront cost will be worthwhile, however, if the solutions implemented successfully take the pain and ache out of processing.
As more and more businesses look to simplify their processing, all-in-one payment solutions are becoming more readily available. They provide far-reaching and flexible coverage for almost any merchant that is looking to simplify their processing. Every day, an increasing number of merchants are making the switch to all-in-one payment processors to make their payments easier and to have a partner in the payment industry who can help walk them through the complexities that come with payments.
How REPAY can help
As the payments industry changes, REPAY is here to educate you! REPAY is an all-in-one payment processor offers omni-channel payment solutions that are integrated into the business systems you use every day! REPAY also provide features that are simple and easy to use, like REPAY ClickToPay, to help you get paid faster! The future of business software is trending towards more friendly interfaces and easier to use programs, and REPAY will be leading the way!
Stay up to date on the future of payments in 2020 and beyond, and get started with REPAY today!