For several years, the payment industry has been in a consolidation phase. A large number of mergers, joint ventures and investor participations have taken place in recent times. On one hand, this naturally results in a general market adjustment, but on the other, it creates certain monopolies of power. The largest payment service providers (PSPs) establish themselves by securing smaller niche companies to integrate into their portfolios, in order to cover the entire value chain.
Acquisition, fraud prevention, omnichannel solutions, to final collection: merchants increasingly want the full range of services from a single partner. This is to be expected if you consider merchants have to rely on different service providers and contact multiple support systems for each provider. This ties up the company’s own resources, complicates processes and ultimately slows down business.
What changes will these consolidations bring to the market as a whole? Can retailers and consumers hope for innovations that will revolutionise the entire payment process? At the very least, mobile payment is set to continue gaining momentum. Released in 2016, Google Pay has been available in the UK for some time. Hailing from Cupertino, California, Apple Pay’s made a PR-laden entry into the market a year earlier in 2015. Consumers now also wish for so-called ‘wearables’ to be able to be used for payment. Not only will the smartphone be contactless, watches and data glasses should soon do the job. This puts into question whether paying with a mobile device will send e-payments or credit cards and into complete retirement. The haptic cards can still be found in almost every wallet and remain in great demand among consumers.
The possibilities are far from exhausted. Using your own car as a payment method is no longer just a dream of the future – if you travel to another European country, the payment of country-specific tolls will be facilitated. A chip built into the car stores the user’s bank details, and contactless payment is triggered if you cross the border. This technology can also be further developed for future parking in city centres or at petrol stations.
These versatile options open new doors for advertisers. With geotracking, attractive offers, coupons or discount campaigns can be sent directly to a smartwatch or into the viewing window of data glasses via push messages.
There is still a long way to go before the first functioning test systems are implemented. A large number of users are highly curious about this new tech. There are still a number of safety concerns – after all, the delicate issue of money is at stake. In order to rule out existing and justified concerns, providers and technology still have work to do. However, the recent past has shown how quickly the payment industry and fintech companies can react to current market events.
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