Payment Predictions in 2016 from our CEO, BC Krishna | Part 2
In our last post, BC shared his thoughts on what payments will look like in 2016. Today, he’ll share the biggest trends and obstacles the industry will face and what payment types will become increasingly popular this year.
What are the biggest trends and obstacles for the payments industry in 2016?
- Payment players are generally regulated. And, regulated entities will always complain that there’s too much regulation (never mind that regulation also creates entitlements unavailable to the unregulated). So, one continuing storyline in 2016 will be that regulation will serve as an obstacle for those that will choose to use it as an excuse to maintain the status quo, and will serve to create opportunities for those who are willing to crash through walls, innovate, and “figure it out later.” Would we have Uber and alternative-lending platforms without regulation that slowed established industry players?
- Another obstacle that the payment industry continues to face is an often-asked question that causes innovators to curl up into a fetal position and moan loudly in disbelief and agony. The inevitable question asked of any new project is this – “What’s the business case?” Beware the source and motivation behind this question. Often, this is framed in innocent terms – of course you need to be able to justify investments. But also quite often, it is somebody protecting hallowed turf that they, in turn, scratched and clawed for oh-so-many-years to establish and stake out. Either way, the point is this – investments in payments technology and innovation can be VERY difficult to justify, VERY slow to pay off, and OFTEN quite disruptive to established players. Wait, are we talking about mobile wallets again?
What forms of payment will become increasingly popular in 2016?
There’s no question that we’re continuing to see a shift toward card-based transactions in all their various forms – credit and debit, p-card and virtual card, prepaid, and private label. There are powerful forces and incentives driving these transactions. Consumers are drawn into more card-based payment experiences embedded into their smartphones and smartwatches, large consumer billers like Verizon and Comcast make it easy to enable consumers to auto-pay their monthly bills through ever-more-friendly biller websites, and we will see a significant increase in the use of one-time-use “virtual cards” for B2B vendor payments. These can be very expensive transactions for card-accepting merchants, and we should expect the card-accepting merchant community to push back hard, but not in 2016.
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