By: Deirdre Ives
There was a time when payments were simply the plumbing of the economy: vitally important, and invisible when working properly. Today, things are quite different, particularly in the retail sector. Consumers expect more and more choice, autonomy and transparency. The volume and value of transactions are multiplying by orders of magnitude. And payments are taking place on myriad channels, in multiple currencies, across dissolving borders, nonstop. Today, the name of the game is innovation – not only in technology but in how we solve problems creatively to better serve our customers.
In 2018, any conversation about how products and services are bought and sold begins with the medium. The customer’s journey takes place at home and on the go; it takes place in the store, on desktops and laptops, on phones and tablets. Where people pay matters, to be sure; 78 percent of consumers own a smartphone, on which they spend 5 hours per day on average (that’s across all age groups, according to one report).
That extremely personalized experience – having all the information and contacts they could want at their fingertips anytime, anywhere – has led to high expectations around choice. It’s also led to certain expectations about how they use their money, as evidenced by the proliferation and success of P2P payment services like Venmo and Zelle. And as consumers become more fluid, so do we, providing businesses with more connected and efficient systems through which to serve customers and gain their trust and loyalty.
But the medium is only a gateway – its influence is intimately tied to the method. So our innovations also need to be linked to preferred payment methods and the new global realities that are influencing those choices. According to 2015 data from Experian, the average American has 2.25 credit cards. A recent study by NerdWallet found that 50 percent of consumers use P2P options at least one to seven days per month. Two out of three online shoppers – 94 million Americans – have information on at least one payment method stored on at least one website or mobile app. This implies that consumers are juggling more and more payment methods and form factors; expecting more control over how, when, and with whom they share their money and their information; and trusting merchants and payment facilitators to protect their financial and personal data.
(Just to bust another myth: A national phone survey by CreditCards.com found that people born between 1925 and 1945 are twice as likely as those in other age groups to store their payment details online.)
What’s more, the dance between tech advancements and payment diversity has contributed to a dizzying pace of transactions. IBM reports that globally, we create 2.5 quintillion bytes of data every day – in other words, 90 percent of the data right now has been created in the past two years. And the volume and rate are only increasing. We’re also spending more: In the US alone, consumer spending was $11.9 trillion in the third quarter of 2017; it was an inflation-adjusted $1.32 trillion in all of 1950. And today we are no less likely to buy and sell with a vendor in Switzerland or Japan as we are to patronize the mom-and-pop store around the corner.
To stay in the game, we anticipate not just consumer trends but how our clients’ markets will evolve well into the future and come up with creative solutions. Only a tech-savvy, innovation-first approach can accomplish that consistently.
Take the mobile wallet, for instance. In the US, 56 percent of consumers are expected to transact $503 billion in mobile payments by 2020; they also are expecting increasingly faster, safer, and more convenient payment methods. We believe that the mobile wallet is the form factor they will adopt.
Wirecard has led the charge globally, providing clients with omnichannel payment systems, data-driven loyalty programs, and global-scale expertise to handle growing demand. Our successful track record includes international wallet ecosystems like Orange and Singtel and our own mobile payment method, boon. We’ve integrated with Alipay and WeChat Pay in Europe. In the United States, we have already enabled Samsung Pay Rewards to help merchants incentivize customers to use the technology. As a global company, Wirecard is bringing global experience and partnerships to provide clients with the agility, creativity, responsiveness, and scale to keep up with the pace of change.