2016 was an interesting year in the payments industry, with the first full year of EMV, the increasing usage of mobile wallets, the rise of biometric authentication, and the introduction of faster payments (same-day ACH) in the U.S. While it’s been an eventful year, all of these events have the industry poised for even bigger and better things this year. Below are some highlights of what shaped payments in 2016, and what effect they may have on 2017 and beyond:
Reducing shopping cart abandonment. Companies will be investing money into finding out how to improve the customer experience, and therefore reduce shopping cart abandonment, which is when a customer shops on a website and adds merchandise to the shopping cart but does not purchase it. A statistic from the Baymard Institute says an average of 68.83 of online shopping carts are abandoned, and it is believed that number is even higher with mobile devices. Business Insider puts the value of unpurchased merchandise at $4 trillion. That is a lot of money and merchandise to be left behind, and the experts believe it is worth the investment to discover why this is and how to improve the statistics. Splitit has some suggestions on how companies can help to reduce abandonment on their individual sites.
Improving mobile wallets and POS. Mobile wallets may not yet be mainstream, but that day is definitely coming. They’re certainly not going anywhere, so it’s just a matter of when. So far in 2016, retailers have been a bit slow in adapting to the new EMV chip card readers, but that rate is increasing, as is the rate of acceptance for mobile wallets, which some consumers have adapted ahead of EMV. Many consumers state the “tap and pay” action as being more familiar and comfortable for them as it mimics the quick swipe of a magstripe card. With Apple Pay and Android Pay on most new smartphones, and many stores like Walmart and Kohl’s with their own payment methods, not to mention many major banks, as well, we are moving closer to a world that is readily able to accept mobile payments as easily as credit payments, and a consumer market that is becoming more comfortable paying with their phones than their credit cards.
The importance of data from wearables. Smartwatches and other wearables track all kinds of information about us, including but not limited to heart rate, calories burned, sleep patterns, stress levels, and even fertility cycles. Beyond simply using them to know the time, we use these gadgets to give us a snapshot of our overall health and fitness levels, and even to encourage us to eat better and exercise more. And as valuable this data is to us, it can also help create a highly personalized and intimate mobile shopping experience, especially as more wearables integrating payments into their functionality. The data can be used to create user loyalty to the brands integrating it into their one-on-one advertising. Although this is a completely new area for marketers to explore it doesn’t necessarily mean you’re going to see an ad when you check your Fitbit to see how many steps you’ve taken today or how many calories you’ve burned. Rather, companies are working on ways they can monetize your data to for mutual benefit.
Mobile phones have become the most popular device on the planet, and have enabled mobile-based commerce to grow into a truly global phenomenon. As payments become more mobile, it is imperative that those involved in the industry continue to evolve payments and methods to meet the needs and desires of an increasingly more connected consumer base.