The financial and payments industry is in constant innovation, driving new solutions to enable businesses to reach more customers, and to facilitate payments more smoothly. Payment technology is making it easier than ever to access and send funds, as well as run internal business operations safely and easily.
Read on for DPO’s predictions for the world of payments in 2020.
Have you heard of AI? Artificial Intelligence has been making an impact on many business sectors for years now, and the financial sector is among those to see benefits. In fact, according to IDC, financial services companies will spend $11bln USD on AI in 2020.
For a basic definition, AI is a means of using technology to simulate (somewhat) human intelligence to perform certain functions. Typically this applies to things such as reasoning, problem solving, planning, learning, and other actions. So how is this being applied to payments and finances?
AI will enable payments technology companies to fight fraud more intelligently; a critical role for the processor, merchant, and customer alike. With the ongoing battle against fraudulent charges (and fraudsters seemingly innovating nearly as much as the systems themselves), fraud detection and prevention is a key component to be addressed by AI technology.
AI enables payments companies to run algorithms and analyze data more swiftly and precisely. Due to the nature of AI, this not only helps companies to identify fraudulent activity more accurately when it’s attempted, but the systems also learn from each transaction, improving its accuracy on the fly. All of this happens in the background, saving merchants and their processors the hassle of relying on constant human attention and intervention.
We’ve been speaking about prepaid cards for some time now, as they gain in popularity amongst consumers and merchants alike. Prepaid cards function like credit cards, without the line of credit. They enable consumers to transfer cash to a card balance, adding a layer of security to the money they’re carrying around, and enabling them to process payments online or at payment terminals.
In 2020 we predict an expansion of the use of prepaid cards, especially when it comes to internal business functions. Prepaid cards can be assigned to internal departments for use for expenses and paying invoices, without the risk of budgetary limitations being exceeded. They can also be provided to employees for travel related expenses, or for use for expense accounts.
One step further would be the use of prepaid cards to pay employee salaries, enabling companies to deposit into the cards each pay cycle and bypassing the need to track or manage bank account information. They can also be used for gifts and incentives.
Prepaid cards for internal business functions save the cost and time of printing physical checks, internal approval processes for purchases or expenses, and other general time-consuming processing and management functions.
Explore the options of the DPO Card – A prepaid card and virtual card for merchants
Voice payments tie in a little to the AI realm of things, as another layer of using smart technology to complete payments.
With the popularity of devices such as Amazon’s Alexa, Apple’s Siri, and Google Home (and Amazon Pay, Apple Pay, and Google Pay amongst others), it may be no surprise to hear that these personal assistants will begin processing payments for you as well.
As AI gets smarter, it becomes easier to authenticate (to confirm that the user is who they say they are) through voice recognition. It makes sense, then, that a consumer could complete a purchase after instructing their assistant to search for a product, check availability, and provide a price.
At the time of writing, Amazon is leading the way in this full-service functionality, with its rivals on its heels.
Digital Banking and Digital Accounts
2020 will continue to see the rise of digital banks – institutions without brick-and-mortar locations. Since these banks don’t have the operational costs of maintaining physical locations, they often offer better rates and lower fees. With more and more people doing their majority of their banking online, digital banks have a lot of appeal.
Not only consumer banking is moving online, of course. Merchant accounts are also moving to wholly digital formats with payment service providers. Merchant accounts are a type of bank account that enables merchants to accept payments via credit and debit cards. When customers make a payment, the funds are passed through a merchant account and into the connected bank account. Payment processors such as DPO are now offering merchant accounts as a standalone option – merchants no longer need to have an account with a banking institution to have an eCommerce offering.
Many years ago, PayPal began a trend that continues to evolve today. What began as a service to be able to send money to friends, family, and merchants via the web without a dedicated payment gateway has evolved into many offerings allowing people to easily transfer money between one another, and businesses of various sizes.
Venmo, Apple Pay, Google Wallet, Snapcash, Twitter Buy… Many companies are getting in on this trend of passing money without cash. It’s handy amongst consumers – why split the bill when you can simply send money in real time to the person paying it – but businesses are catching on.
These social payment services link directly to end user bank accounts, or either debit or credit card information. The money is drawn from the account when the transaction is made, and sent to the receiver’s account. This makes payments as easy as the click of a (digital) button, and transfers are typically made within a day or two.
Businesses are leveraging this trend by creating their own apps on top of this existing technology. Imagine setting up a virtual gift card which can be scanned at a register, or will generate a code to be used online. Brick and mortar stores these days often have an option at their payment terminal to tap-and-go using an app on a mobile device, making the payment process easy on the customer and removing the need for intervention from the cashier.
The continual innovation in the world of payments makes 2020 an exciting time. For merchants to keep up with the trends and adopt new payment technologies, they rely upon a payment processor who continues to innovate as well. DPO has been providing secure payment services and utilizing industry-leading technology since 2006.
Contact DPO to learn how we can help you build your business, reach more customers, and streamline business processes.