A Contrarian’s 2017 Payment Predictions

December 20, 2016

Payments will become increasingly invisible

Payments will continue to disappear behind apps and behind devices. While Apple Pay does a great job of displaying the card art, thus preserving the FI’s brand, not so much with the smart fridge or the Lyft app. It is becoming a set it and forget it payments paradigm, challenging issuers to maintain their brand and making it more difficult to maintain top of wallet/app/phone/fridge.

Merchants will really bring frictionless checkout to the forefrontpartner-cscu

Google Handsfree and the Amazon store in Seattle with no checkout terminals or lines, are just scratching the surface. Starbucks could easily shave time off the checkout, and make the always packed drive through just a little shorter, by eliminating the exchange of payment credentials.

Fraud. ‘nuff said

Fraud will be on the predictions list every year for the length of the career of anyone reading this. In 2017, look for merchants to begin to implement Card Not Present fraud solutions, such as what Netflix did taking the giant step to tokenize their card-on-file database, and look for e-commerce merchants to expand use of 3D-Secure checkout.

Fraud (reprise)

Hackers are sitting on a treasure trove of payments credentials taken from POS breaches, together with names and passwords and addresses taken from other breaches, such as Yahoo. Account takeover, identity theft, and other forms of fraud much more intrusive and individually devastating than counterfeit cards will balloon in 2017.

Millennials

Yes we all have seen the stats that millennials outnumber any other generation, that they will control the majority of spending, with the emphasis on “will”. But not in 2017. While vendors will continue tripping over themselves trying to attract the 19-35 year olds, the lack of spending power of the younger half of this generation will mean that: 5a) bank branches will not disappear in 2017; and 5b) cash will still dominate transactions in terms of numbers.

P2P

The ability to pay family/friends is still bogged down in cash and checks, except for millennials who have already found the simplicity and beauty of Venmo. The rest of us will begin to figure out how easy it is to make P2P as Zelle and other solutions reach the market.

Mobile Wallets will continue to proliferate

Anyone who questions how many wallets does someone really need will not be happy with the answer, as we see more merchants create better shopping experiences such as Kohl’s, which combined their rewards program with a simplified, closed loop purchasing app.

The blockchain hype will start to lose steam

It seemed like every session at Money2020 this year required the mention of “blockchain” at least once. But there is growing convergence that a real, commercially viable, standardized, secure solution is not going to happen next year, nor the year after. Prediction is that the press and media will realize that this is long road to travel, and the hype will die down in place of real news, if any in 2017.

What are your predictions? Feel free to share your thoughts on Lou’s predictions on LinkedIn, Facebook, and Twitter!