Banking Outlook 2017 - Payments
Take a closer look
Payments are becoming faster, and systems become more customer-friendly. How will such developments shape the Payments industry next year, and how can firms respond to these trends? Download the Banking Outlook 2017.
The global drive towards faster payments has pushed US banks to join the Federal Reserve’s Faster Payments Task Force to collaborate with each other to create a linked, networked nationwide payment system. In line with this effort, many banks have joined the e-wallet market and mobile commerce is growing faster than ecommerce overall, which is growing faster than overall commerce.
Digitization to improve customer experience will dominate payments growth initiatives. Faster payments will see a significant surge in 2017 as banks roll out a collaborative system while agreements and partnerships increase among banks and fintechs with the blessing of the Federal Reserve. Part of this digital transaction transformation will happen through stored “default” payments methods, which will claim a larger share of digital spend both online and through e-wallets and other types of mobile and automated transactions.
Front-facing and collaborative systems
Banks will likely begin to turn their payment operations inside-out to be more front-facing. Some operations that reside in the back-office will likely migrate to front-facing and collaborative systems to accommodate networked digital technology. 2017 is likely to see the introduction of a next generation PoS system that leapfrogs the need for the many merchants who haven’t done so yet to install EMV terminals.
Payments regulatory radar
Faster payments, cyber risk and intellectual property take center stage in the payments regulatory radar. The diffusion of real-time payments will attract Consumer Financial Protection Bureau (CFPB) oversight, which has been on fintech high alert as of late, and the Office of the Comptroller of the Currency (OCC) will solicit public input regarding the creation of a non-depository fintech charter that promotes “implement[ing] a regulatory framework that is receptive to responsible innovation.”
IoT-enabled payments, bots and encryption solutions will be primary technology drivers. Now that in-app and mobile wallets have become ubiquitous payment tools, their operability will likely see frequent and transformative software and maybe even hardware upgrades throughout the year. Similarly, biometrics are expected to increasingly become integrated into digital payment systems, particularly mobile, to increase security. Bots will likely increase through social media, following a trend that began with considerable fanfare in the US and China.