The past few years have brought rapid evolution and change to the payments industry, with the same growth expected in 2017. Retailers must remain aware of these developments to properly compete with other operations in their vertical market. Here is a close look at three critical payment trends that will prevail this year.
Mobile Wallet Growth
Statistics make a strong case for including increased momentum for mobile wallets on the list of significant payment trends to watch in 2017. This is especially true of mobile wallets that incorporate near field communication (NFC) technology.
- According to a report by research firm Research and Markets, the global mobile wallet market will experience a compound annual growth rate (CAGR) of 35.5% between 2017 and 2021.
- Technavio, another research firm, has predicted a similar CAGR (more than 35%) for mobile wallets through 2021.
- A Capital One Wallet Survey conducted by Capital One late last year shows that nearly one-quarter (24%) of U.S. consumers use mobile wallets in some capacity.
- More proof that the use of mobile wallet technology among consumers is trending up: Of 24% of Capital One survey respondents who claimed to utilize mobile wallet technology, more than 63% have been doing so for less than a year. This demonstrates rapid adoption and use of the technology in 2016, according to Capital One, with a similar pattern expected throughout 2017.
Ongoing technological advanced in NFC devices and heightened security of payment portals rank among catalysts for the consistent growth of mobile payments and its high rank among key payment trends, according to Research and Markets and Technavio. Mobile wallet options such as integration with coupons and tickets are fueling the fire as well.
Payment Security Push
With perpetrators’ attempts as and methods for transaction fraud growing more sophisticated, increased and varied attempts to shore up payment security is one of the hottest payment trends. There is now a major move among U.S. merchants to migrate to point of sale (POS) equipment that accommodates microprocessor chip-enabled credit and debit cars (“chip cards”) under the umbrella of the Europay/Mastercard/Visa (EMV) liability shift that took effect in October of 2015.
- The Payments Security Task Force, a consortium of payment networks, backs, credit unions, acquirers, retailers, POS device manufacturers, and industry trade groups, estimates that the shift to EMV will “reach 98%” by the end of this year.
- According to Mastercard, 9 in 10 Americans now user chips cards, a 38 point year-over-year increase from 49% in 2015 to 87% in 2016. Payment trends cited in a recent Mastercard report includes additional increased in chip card usage in 2017.
Mobile point of sale (mPOS) and tablet POS devices are becoming a staple as merchants adopt mobile technology to assist with line-busting and speeding up transactions during peak traffic periods. What’s more, with innovations like Star Micronics’ new mPOP™ accessories, tablet POS devices can be used as a cost effective, fully functioning point of sale system. This versatility makes mPOS a hot ticket item in 2017.
- According to a study conducted by Boston Retail Partners, almost half (49%) of retailers are using mobile solutions for sales staff. That’s up from less than a third (31%) from last year.
Payment trends other than those discussed here may also take hold in 2017. However, the rise of mobile wallets and mPOS, coupled with a greater emphasis on payment security, merit special attention in the coming months.
Learn more about the mPOP™, Mobile Point of Purchase, here.