Wed, Sep 22, 2021

Persisting COVID-19 Pandemic: CCV Switzerland Predicts Changes In Payments Industry Come 2030

Persisting COVID-19 Pandemic: CCV Switzerland Predicts Changes In Payments Industry Come 2030

AccuraCast, an international digital marketing agency has aligned some 10 predictions on the eventual change in payments industry given the way consumers view payment options within the pandemic.

The predictions are highlighted in a press release titled "10 predictions for payments in 2030 - how the payments industry will change," issued Monday April 26, by CCV Switzerland. CCV is the leading independent provider of payment infrastructures such as payment terminals, cash registers, customer loyalty and purchasing card systems in Switzerland.

According to Fabio Carvalho, digital marketing specialist at CCV Switzerland, “the COVID-19 pandemic has changed the way consumers view payment options. In particular, it has forced consumers to overcome their inertia, and has created an unprecedented global appetite for changes in the way we pay, as businesses adapt to make payment transactions fast and secure for customers and employees.”

Going by a study realised by Visa’s Back to Business, 78% of global consumers have adjusted the way they pay as a result of the pandemic. Thus, the study further predicts that, “by 2023, five countries will have launched digitisation initiatives to eliminate cash. By 2024, global cash in circulation will be reduced for the first time after decades of continuous increase and mobile proximity payment users will double to nearly 2 billion worldwide, from less than 1 billion in 2019.”

In the same vein, in the decade to 2030, the pace of transformation in the payments industry is expected to accelerate. Non-traditional players will continue to enter the market, from global technology giants to car manufacturers and consumer goods companies, introducing new payment innovations.

Here are 10 predictions on what will happen to payments by 2030

Nation states will launch their own digital currencies to maintain control over economic policy. The growth of digital currencies has worrying implications for sovereign states and central banks, which risk losing sight of the financial flows through their economies. As such, expect more countries to follow China’s lead in launching a state-controlled digital currency; for example, last October the Bahamas launched the Sand Dollar. Each country that does so will assert the supremacy of its digital currency over non-sovereign alternatives, but will also be competing with the currencies of other countries.

Regulators will control payment processes rather than providers. With so many new players emerging in payments, including many outside banking and even financial services, today’s regulatory systems, built around oversight of the activities of individual institutions, are increasingly inadequate. Instead, a new multinational approach to regulation, through which national regulators control payment processes rather than individual providers, will emerge.

The payments value chain will be data-driven. In a new world of open banking and APIs, the greatest exchange of value will take place in transactional data rather than in the transactions themselves. This data will open up a wide variety of new opportunities, from fighting fraud to sophisticated financial planning for consumers, with businesses benefiting too.

We will reach an international consensus on data privacy. Fundamentally, data has the potential to transform the payments industry value chain. However, to achieve these goals, it will be crucial to establish greater international consistency in data protection and privacy laws. Debates about what standards should be applied globally, who should control the data and how the rules are enforced will need to be conducted in the broader context of the debate around protectionism and free trade, particularly given the power of the technology giants in the US and China.

Almost all citizens of the world will have their own biometric digital identification. The inconsistent application of digital identity today means that in some countries people can transact freely and easily, while in others, where it is more difficult to verify identities and assets, there is much more friction in the payment system. These barriers will diminish as nation states and payment providers work together to establish internationally recognised digital identity standards, increasingly leveraging biometrics, including facial recognition, fingerprints and implants.

Payments technology will reduce financial exclusion. Developed economies will learn from the success of mobile channels in many emerging markets, reducing financial exclusion. For those currently struggling to access payments and financial services more widely, a digital identity will be a golden key, unlocking services from payment to banking, and enabling them to establish credit histories, sometimes for the first time.

The social experience will converge with payment technology. The convergence of social media and payment services, already well established in China, will spread internationally. This will create new opportunities for payment service providers and their customers – for example, to enable merchants to engage with individual consumers on a large scale via such networks.

The technologies will support a globally connected high-speed payment network. Distributed ledger technologies have the potential to be the primary means by which we build the payment system of the future. Cloud computing and API tools will link block chains to create high-speed cross-border networks: an “internet of value” through which payments flow unimpeded, just as information now flows on the World Wide Web.

Real-time payments will become the norm, even for cross-border transactions. As blockchains dissolve the boundaries between national systems, payments will be instantaneous, even when they are cross-border.

Payment ecosystems will evolve as new entrants and established companies collaborate. In the highly regulated financial services market, where payments are a potential source of systemic risk, new entrants will need – and want – to work alongside banking partners. Together, these organisations will create new payment ecosystems. The experience of emerging markets where new entrants have come together with incumbent providers and regulators to create new payment systems from scratch will be replicated on a global scale; without such collaboration, transformation will not be possible.

In the meantime, Fabio Carvalho called on application managers to protect business continuity and align with changing customer payment expectations. This is to prepare for the changes ahead. Therefore, digital trade payment technology managers should protect or improve their sales volumes by optimising their digital trade channel and unified trade initiatives. They should equally provide consumers with ways to shop and pay contactless in the physical shop.

Recalibrate the effectiveness of commercial monitoring in this new payment system, continuously evaluating and modifying key performance indicators and metrics will be key come 2030.

He also called them to measure the resilience of their payment offerings by evaluating the offering of their commercial payment provider(s) and increase the resilience of their organisation by leveraging payment provider initiatives designed to help them adapt to the current and emerging environment.




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