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Experts named the trends that will determine the development of the payment ecosystem in 2021.
Payment Business Trends - 2021.
The payments industry is actively developing - 2020 was a very busy year for the industry. Companies modernized infrastructure, invested in cloud services and digital technologies, participated in mergers and acquisitions, and established cooperation with FinTech.
Experts believe that 2020 will be a period of even higher rates. A new report from Deloitte Payments 2021 presents five trends that will shape development strategies and challenges for the payments ecosystem over the next year.
There are closed payment systems such as mobile payments in Starbucks, which allow you to select and pay for goods within one application, accumulate bonuses, and then use them for the next purchases in this coffee shop. And open systems like the Google Pay wallet, which can be paid at all points that accept contactless, but without additional loyalty programs.
The question is, do customers value more: personalization or more choice? In 2020, we have to find out.
Experts expect increased competition between established providers of closed and open payment platforms. The former will create their own payment products that offer the customer increased value within a single platform. The latter will focus on expanding infrastructure to make payments easier.
Traditional indicators (speed and convenience of transactions), on the basis of which the competition in the field of payments has been built, is gradually losing value. Companies can no longer rate their services based on old advantages. Therefore, they will have to analyze in detail the needs of customers, create added value for products, and expand their business to related markets.
The globalization of the payments industry requires new standards for managing cash flows and protecting customer data. All companies that accept, process, store, or transmit credit card information must already comply with the Payment Card Industry Data Security Standard (PCI DSS). In addition, each region has additional rules for regulating payments.
The challenge faced by international payment operators stems from the fragmented payment infrastructure. Each country has its own internal payment systems and services for sending money abroad. It can be quite difficult to bring them to a single standard, or at least set them up to work well together. But such a task is facing the market in 2020.
The development of a global standard ISO 20022 is already underway, which will define the procedure for the exchange of payments, payment mechanisms and integration. Progress is also expected to develop stricter standards for the assessment of risky transactions.
Central banks and other government agencies will take a more active part in shaping the
payments ecosystem.
Some regulators have indicated their right to vote in payments this year. Thus, the US Federal Reserve Board announced that it will develop a round-the-clock real-time settlement service FedNow. And the Central Bank of China spoke about plans to launch a state-backed cryptocurrency.
In addition to developing new products, regulators can tighten controls on money laundering and other violations. And demand that major players implement appropriate changes in their payment networks, including through digital tools.
The rapid development of the industry requires a professional approach. Therefore, financial companies will actively compete for talented employees. And the ability to find, hire, develop and retain people with the desired skills, as well as the ability to rebuild legacy business structures, will become critical for business leaders. And they will require from them not only financial investments, but also new skills.
Knowing these trends will help shape strategies for organizations seeking to succeed in a dynamic payments market.
Payment Business Trends - 2021.
The payments industry is actively developing - 2020 was a very busy year for the industry. Companies modernized infrastructure, invested in cloud services and digital technologies, participated in mergers and acquisitions, and established cooperation with FinTech.
Experts believe that 2020 will be a period of even higher rates. A new report from Deloitte Payments 2021 presents five trends that will shape development strategies and challenges for the payments ecosystem over the next year.
Trend # 1: Competition between closed and open payment platforms
Which system to choose - open or closed?There are closed payment systems such as mobile payments in Starbucks, which allow you to select and pay for goods within one application, accumulate bonuses, and then use them for the next purchases in this coffee shop. And open systems like the Google Pay wallet, which can be paid at all points that accept contactless, but without additional loyalty programs.
The question is, do customers value more: personalization or more choice? In 2020, we have to find out.
Experts expect increased competition between established providers of closed and open payment platforms. The former will create their own payment products that offer the customer increased value within a single platform. The latter will focus on expanding infrastructure to make payments easier.
Trend # 2: Development of the payments economy
Added value is the future of the payments economy.Traditional indicators (speed and convenience of transactions), on the basis of which the competition in the field of payments has been built, is gradually losing value. Companies can no longer rate their services based on old advantages. Therefore, they will have to analyze in detail the needs of customers, create added value for products, and expand their business to related markets.
Trend # 3: Development of new payment standards
The industry needs new rules.The globalization of the payments industry requires new standards for managing cash flows and protecting customer data. All companies that accept, process, store, or transmit credit card information must already comply with the Payment Card Industry Data Security Standard (PCI DSS). In addition, each region has additional rules for regulating payments.
The challenge faced by international payment operators stems from the fragmented payment infrastructure. Each country has its own internal payment systems and services for sending money abroad. It can be quite difficult to bring them to a single standard, or at least set them up to work well together. But such a task is facing the market in 2020.
The development of a global standard ISO 20022 is already underway, which will define the procedure for the exchange of payments, payment mechanisms and integration. Progress is also expected to develop stricter standards for the assessment of risky transactions.
Trend # 4: Participation of regulators in the formation of the ecosystem
Regulators want to influence the payment industry.Central banks and other government agencies will take a more active part in shaping the
payments ecosystem.
Some regulators have indicated their right to vote in payments this year. Thus, the US Federal Reserve Board announced that it will develop a round-the-clock real-time settlement service FedNow. And the Central Bank of China spoke about plans to launch a state-backed cryptocurrency.
In addition to developing new products, regulators can tighten controls on money laundering and other violations. And demand that major players implement appropriate changes in their payment networks, including through digital tools.
Trend # 5: The battle for talent
The industry is facing a struggle for personnel.The rapid development of the industry requires a professional approach. Therefore, financial companies will actively compete for talented employees. And the ability to find, hire, develop and retain people with the desired skills, as well as the ability to rebuild legacy business structures, will become critical for business leaders. And they will require from them not only financial investments, but also new skills.
Knowing these trends will help shape strategies for organizations seeking to succeed in a dynamic payments market.
