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Being part of the human race, we often can’t help but have our eyes drawn to the next shiny object. But inherently, we often miss the most significant innovation of the time happening right in front of us. It’s like when we focused too much on 3D televisions and not enough on OTT streaming. While there is a fundamental reason to be excited about the metaverse, NFTs, Web3, and all of the possibilities they hold – there is something much more tangible happening right in front of us, and we’re already taking part in it. Payment transformation is everywhere. While our phones haven’t changed much in the past five years, how we pay for things has. It’s been incremental, but if you look back even five years, you can see how drastically our consumer payment habits have changed.
The more exciting thing about payment transformation isn’t the payment itself; it’s how brands and enterprise solution companies use the payment as an initial touchpoint in apps to drive loyalty programs, curate personalized experiences, and equitable programs. In other words, being able to pay for something directly through an app isn’t even the point of the app; it’s just what gets you in the door to become a brand-loyal customer.
In 2023 and beyond, concentrated convenience rather than commercial awareness will get you to choose a brand. And the applications are endless. Starbucks is probably the universal example because the app lets you order ahead, pay contactless, and skip the line. It also gives you personalized incentives to purchase your favorite items more often. Payments and convenience are always inextricably tied, but to explain payment transformation, the best is the creation of complex backend solutions to make the consumer experience as frictionless and easy as possible. Friction is the enemy of payments. As our attention inevitably fragments, we only notice things when they don’t work; we only stop to question a fee when it isn’t seamless or trustworthy.
What Will Payment Transformation Look Like In The Near Future?
Global fintech Worldpay from FIS’ Future Payments Predictions for 2025 answers one of those questions in the name. But the interactive guide delves into nine different industries, from travel and retail to groceries and gaming. FIS is a critical player in all sectors in introducing new payment technologies. This month, Worldpay for Platforms also launched a tool that allows software companies to empower that serve small-to-medium-sized businesses (SMBs) to advance their users’ interactions by embedding payments and finance more seamlessly features into their software or platform through a single integration.
While v-commerce (pay by car), being able to pay through metaverse universes seamlessly, and a few other innovations mentioned catch your attention. There are also some very tangible things happening right now that make complete sense. Travel companies are racing to be the most convenient and interwoven super app. We are already conditioned to use one app to search for multiple things. Still, the ability to take a trip (especially internationally) and have the ability to find and pay for everything within one app with no currency issues can easily create brand loyalty. Once there is brand loyalty, the ability to make recommendations while on the trip or future trips opens up endless possibilities.
Major grocers have a real opportunity to use BaaS (banking as a service) to elevate the Starbucks app model. People often ponder a fully contactless point-of-sale, but that still comes with some hurdles and expenses. The natural and present opportunity is to become a one-stop-shop for people in grocery and have the payments app double as a banking app. On the B2B side, all the small vendors that work with a major grocery chain can also bank, apply for loans, and strengthen both B2B and B2C loyalty.
Despite rising interest rates, real estate is historically a solid investment. But there are also innovations to help reduce payments to keep buyers motivated. MeridianLink has patented automation to help lenders and buyers navigate high-interest rates. Debt optimization is an automated process a financial institution can tap into before a mortgage loan closes. This automation analyzes a consumer’s financial data to determine if there is existing consumer debt that can be consolidated or refinanced within the financial institution, allowing the possibility of a lower mortgage loan rate or qualifying for a mortgage they wouldn’t otherwise qualify for.
The Role of Speed and Security In Payment Transformation
Speed is undoubtedly critical to payment transformation. Dwolla VP Adam Steinhardt, in a recent op-ed lays out their real-time payments (RTP) network, what that means, and the possibilities that even minor convenient tweaks to our standard systems can make. RTP is still an industry term, but it expects it to be a household name like SaaS or CRM soon. But there are many benefits to sending and receiving money in seconds, not 30 days. That’s more buying power, more efficiency, and for example, more security for gig economy workers who – to some people’s surprise – are often paid weekly, not for every gig.
However, speed only works with security. We all want speed, but people have to trust the process. Experian’s latest offering, Experian Link, creates more certainty for credit card transactions by verifying customers and reducing fraud. Experian is the first credit reporting agency to link consumer identity with a payment method to enable businesses to provide customers with a frictionless online experience. Incorporating additional identity verification makes sense to add an additional layer of security for merchants and convenience for consumers.
Security can also be maximized by using multiple databases. “Use the right tool for what you are doing” is a standard recommendation in the tech world. It is common to use various tools in conjunction to achieve a goal. Payments platform Regpack did just that when it used relationship databases (specifically MySQL) and document-based databases (specifically MongoDB) to reach a complex minimum constant dev structure. An unexpected side-effect was enhanced security structure and privacy for PID (personal identifying data).
The biggest takeaway is that most of us don’t think about payments until they don’t work, aren’t secure, or aren’t convenient. Over the past ten years, we’ve rapidly adopted Venmo, CashApp, Square, tap to pay, Amazon Go stores, and countless other innovations. But the lasting point of payment transformation is that this new wave will have a constant theme of loyalty. The payment is essential; it will innovate, get more secure, and be more seamless. Like an iPhone, all that change will happen without us really noticing. But we will see that our convenient payment habits will drive brand loyalty and personalization. Because if our traditions teach us anything, we will keep returning to whatever creates the least friction, whether we notice it or not.
Feature Image Credit: Getty Images
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A seasoned strategist and executive, I work with some of the most recognizable brands in the world to help them evolve at the speed of tomorrow. I’ve helped build some of the earliest e-commerce Websites, pioneer the field of social media marketing including community management and have cultivated a high quality audience of professionals spanning marketing, technology, communications and user experience design.
