Contactless pay and all things digital show no sign of slowing down
There's been a huge change in the past few months, and that will accelerate moving ahead. The next year is going to be about change — and managing that change without alienating already unsettled consumers.
Organizations that put the customer experience front of mind will be the winners, but they must nonetheless expect additional pressure from regulators, new competition, ever more digitally demanding consumers, and no slowdown in technological innovation.
The past year has fundamentally reshaped all sectors of the economy by accelerating the move to digital, and this will define the banking, transacting and payment trends that will continue.
As a result of COVID-19, consumers have been homebound, which has pushed many traditional businesses further into becoming digital entities in order to service them – we estimate a 30% growth in digital.
We have also seen a lot of digital first-timers, people signing up for online banking and e-commerce, moving away from traditional channels. Many businesses with a strong presence in the real world have had to acknowledge that online transactions are now fully mainstream and realign themselves accordingly. That has provided some challenges.
In the old days, registering a customer for a service would happen in a branch, shop or kiosk — but remote digital registration of customers is now an essential component of any business plan. Even work behavior has been significantly altered. People don’t give a second thought to working remotely and many businesses have reconfigured their operations to make this a permanent arrangement for employees.
This has set the scene. Working from home and transacting from home is now expected at many organizations — it has moved from concept to reality.
The use of contactless technology is growing. More people are tapping with their cards but there’s also a lot more engagement with QR payments. We know that QR can work — it already does in Asia. Consumers like the idea of having complete control of transactions from their own device. They can authenticate themselves when transacting without the need to use a PIN pad. Next year, we expect to see significant developments in QR and NFC-enabled tap and go payments because they do provide a richer experience for users.
Also expect the emergence of completely passwordless systems. With the rollout of FIDO (Fast Identity Online) and the expanding network of FIDO-compliant solutions, we think organizations will start to do away with passwords. They’ll sign customers up by using biometric authentication through devices and digital identities people already have — like those enabled through banking apps, for example. You’ll never again have to worry about remembering or resetting passwords. That’s the promise, at least.
We will see accelerated uptake of delegated authentication in 2021 — the new banking specification that allows merchants to provide their customers with a vastly improved online shopping experience. Delegated authentication regulations mean merchants — instead of the traditional issuing banks – will take control of authenticating e-commerce payments, giving consumers a simple, intuitive checkout experience that looks and feels like an extension of the retail brand.
In the U.S., financial institutions are starting to see some of the challenges around faster payments. The faster money moves, the faster it can be stolen, so we’ll likely see some reaction to that in 2021 as fraud moves back up to being a top-level concern for banks.