Every industry has its buzzwords. Here’s a few key words for the payments industry to keep you in the know.
Biometrics (and Identity)
One trend that is already well underway is the use of biometrics to confirm identity. The hope is that biometrics will allow us to move beyond the PIN and password with new ways to authenticate users. While some of the technology has been around for a while, consumers have increasingly become accustomed to the idea of being identified by their unique traits in the five years since Apple® introduced Touch ID®.
Out this trend promises to pick up steam over the course of the next year, as Apple is expected to answer Samsung’s® iris scanning technology with Face ID®, the latter of which will likely be included “in three new iPhone® and two new iPad® models that will launch late in Q3 2018,” advises BiometricUpdate.com.2
Near Field Communication (NFC)
Another technology you may soon hear more about is Near Field Communication (NFC), which is short-range wireless technology that permits a digital device (smartphones, tablets) within a few inches of another digital device to communicate. Again, this technology isn’t new, it just hasn’t yet become mainstream is the United States yet.
But there are signs this is about to change. According to the 2017 TSYS U.S. Consumer Payments Study, released in April 2018, 68 percent of consumers plan to make more than 50 percent of their in-store purchases using their digital wallet within two years, which should enable the continued growth of contactless payments such as Apple Pay® and Samsung Pay®.
Notably, public transit can be a venue for wider usage of contactless payments. By allowing riders to tap their phones, transit agencies could largely eliminate old-fashioned tickets, tokens and passes and thereby improve the rider experience.
Scan and Go
In the world of retail, the phrase “Scan and Go” is something you’re more and more likely to encounter in the coming months. Supermarkets especially, as well as big box retailers are big fans of this technology. Grocery giant Kroger has been rolling out its “Scan, Bag, Go” service in 400 stores this year, which allows shoppers to scan items as they shop using a store-provided scanner or smartphone app. Currently shoppers check out at a self-checkout station, but they will soon be able to pay through the app, saving the time they might otherwise spend waiting in a checkout line.
Push Payments (aka Instant Payments)
Speaking of saving time, one can make a good argument that the next big thing in payments will be push payments--a form of instant payments. That is, a push payment can be sent to a debit card, credit card, reloadable card, online wallet or PayPal® account, among many other options. Instead of waiting for funds to arrive same day, next day, or in three to five days, payment recipients receive their money immediately.
It’s easy to envision scenarios in which push payments would be valuable to consumers or small businesses—especially when funds are needed urgently. For example, an instant loan approval could be followed with instantly available funds. Or in the case of a cancelled or overbooked flight, a push payment made by an airline would allow a stranded traveler to buy food or reserve a hotel room with the funds straight away, instead of fronting the unexpected costs and receiving a voucher to be redeemed later.
As the payments industry begins to move into the last fiscal quarter for 2018, and execute planning for 2019, expect your vocabulary to grow with an abundant harvest of buzz words.