What trends are you seeing?
2012 was an eventful year for the payment industry, as technology and finance converged to create an ever-changing landscape that affects the way consumers buy, businesses sell, and providers cater to their numerous clienteles. Marketers, businesspeople, financial officers and technology personnel are not the only ones who will be affected, but it’s worth paying attention to these upcoming trends now to see how you can tailor your business execution towards the inevitable. This three-part post illustrates the primary trends in business and technology that will impact payment processing in 2013:
15. Paper Checks Become Obsolete
In 2011, the US government effectively killed the paper check by announcing that social security and pension payments would start being made via direct transfer, and debit cards would be allocated for food stamps and unemployment benefits. In 2012, new banking alliances have enabled direct transfers to be made between customer bank accounts online, eradicating the need for people to write paper checks to their friends or business contacts. In 2013, look for checks to hit an all-time low and continue to disappear. Farewell, paper checks. It’s been fun.
14. Online Promotions Are the New Blowout Sales
The statistics from the holiday season in 2012 are compelling. While Thanksgiving and Black Friday sales grew as projected, it was Cyber Monday that was blown out of the water with a 17% year on year growth to the tune of close to $1,500m in sales. Most importantly, Cyber Monday spend was evenly divided between work and home, and tablets played an integral role. As customers move to a model of “sit-back shopping”, it is by creating exceptional online promotions that companies can take hold of the deals-driven market.
13. E-Commerce Widens Offers
As customers continue to put their dollars into online commerce, retailers and service providers are changing their offerings to provide an experience that is closer to the traditional in-store variety. Shipping and return options, rent-to-buy capability, in-store pickups, and even online layaway are all becoming an integral part of the online commerce arsenal. For service providers, offerings have expanded to include live chat functions, deal comparisons and price matching to give every customer the optimum experience they would have when dealing with a live representative.
12. Online Banking Becomes The Norm
As checks become obsolete and third-party online payment providers proliferate for consumers, banking institutions will continue to widen their offerings for end customers. Previously, only businesses had the ability to use Automatic Clearing House functionality to make payments directly from one bank account to another. In 2012, Bank of America followed in the footsteps of Chase Bank’s QuickPay system, enabling customers to make payments not only within the bank, but to customers of other banks too. Look for banks to continue in this vein, perhaps enabling customers to pay one another with a credit or debit card, as per PayPal’s functionality, in 2013.
11. Digital Payment Processing takes precedence
Following the Black Friday statistics which showed a huge spike in online payments, Forbes magazine wondered whether digital payment processing companies may be the future. As “digital dollars” become the primary payment method for consumers both in-store and online, the gaze has shifted more than ever to the performance of digital payment processors and their affiliates.