Consumers are increasingly jumping form one channel to another when shopping and paying, pressuring issuers and other payment companies to simultaneously accommodate older plastic-card models alongside the Web and mobile commerce.
"Across the board, there was a blurring of lines for transactions between where they take place, the channel being used, and the timing of transactions," says Teresa Connors, director of market engagement for international banking at RBS, which recently released its ninth annual World Payments Report with Capgemini.
As alternative payment providers mature, banks and merchants must now consider providing an experience that can work across varied form factors and payment types, and enable payments and orders to be executed at different times within in the shopping experience than in the past.
"The 'omni-channel' payments experience nicely sums up how consumers are engaging payments and shopping differently, and how they're using different venues," Connors says, adding the trend is more in the consumer payments space than in the business payments space, where the relationships between buyers and sellers tend to be more linear.
A number of payment companies, such as PayPal and MasterCard, are using transaction data to add marketing, loyalty and related services to payments. These companies are attempting to drive adoption of their digital wallets and to engage customers before checkout.
"PayPal has a great innovation, where they enable preordering and mobile payments for Jamba Juice," says Deborah Baxley, a principal at Capgemini Financial Services. PayPal is also using Revel's technology to support a similar order-ahead service on Revel's iPad-based point of sale system.
MasterCard is developing a service that uses QR codes to order and pay for a product in a store, then have that item shipped to a buyer's house.
Overall, global non-cash payments will reach 333 billion transactions for 2012, up from 307 billion in 2011, the RBS/Capgemini report predicts. North America and Europe are the most mature markets, accounting for two thirds of global non-cash transaction volumes, though the pace of growth in North America and Europe trails that of developing markets.
Mobile payments and e-payments will grow by 58.5% and 18%, respectively, through 2014, according to the report. However, RBS and Capgemini say the statistics on mobile payments are unclear because of the fast growth of mobile payments in new regions and the trend towards nonbanks playing a larger role in the electronic and mobile payments market.
"There may be an underreported portion of the market, or there may be an overly optimistic forecast," Baxley says. "The payments industry and regulators need to think about better ways to measure mobile payments."
Legacy payment systems will linger for a long time, Baxley says. "For example, checks in the U.S. declined 7%, but checks are still expected to be around for another generation," she says, adding remote deposit capture, which allows items to be read by using a smartphone's camera, is prolonging the life of paper checks.