How will retail payments change in 2015? Influential trends set to shape the industry

22 January 2015

What’s shaping the payments industry in 2015 – and what developments should retailers look out for? Kevin Burns, head of solution architecture at Vodat International, shares his predictions for this year’s hot topics.

1. Mobile payments – this has been on the radar for the past few years, but Apple’s entry to the mobile wallet market in 2014 could be a shot in the arm for other mobile payments providers. Following a successful trial in the US, Apple is set to roll out the service to UK iPhone6/6+ users this year – could this finally take the mobile wallet mainstream?

2. E-money – the use of pre-paid cards linked to e-money accounts is expected to explode in 2015, part of consumers’ continued migration away from card towards card payments. Facebook is already looking to capitalise on this trend by launching an e-money transfer service in Europe.

3. Social payments – already common in countries including China and Korea, a number of social media apps are developing the capacity to transfer money and facilitate transactions. Messaging app Line was the first to go live with this service when it launched Line Pay last year.

4. Contactless payments – 2014 was the year in which contactless took off among consumers, and this will continue to accelerate this year. Retailers not able to process contactless payments will need to move this issue up the agenda in 2015; at the end of the year, all POS terminal deployments will be required to feature contactless and NFC enabled capabilities.

5. Wearable technology – 2015 will be a major development year for the incorporation of payments into wearable technology, spurred on by the launch of Barclaycard’s contactless wristband. Apple may help to drive the use of this technology with its Apple Watch.

6. Payments cybercrime – a number of major retailers including The Home Depot, Target and Staples fell victim to card data breaches in 2014, as payments systems become increasingly targeted by cyber criminals. Businesses will need to up their game to protect their reputation in 2015; 45% of shoppers won’t use a retailer that has suffered a data attack.

7. Data encryption – to counteract the rising threat to payments systems, retailers are turning to data encryption solutions such as Vodat’s Unified Payment Service to protect valuable customer information processed through card transactions. New PCI council legislation introduced in January will accelerate this movement.

 8. Biometrics – in order to take customer security to the next level, more technology companies and financial organisations are partnering to investigate incorporating biometrics into the payments process. Apple, MasterCard, Fujitsu, Visa and Samsung are among the brands already exploring biometrics, and it is anticipated that 5.5 billion people globally will use biometrically enabled technology by 2019.

9. Omni-channel retail – it’s real and it’s on a high street near you. Retailers have joined their channels using the latest ERP integrations, now they’re working on their payments to match. Key to delivering success will be tokenisation – particularly having the same token irrespective of channel.

10. Digital currencies – 2014 was the year of the Bitcoin debate, which proved somewhat inconclusive. However, success for other alternative currencies – such as Iceland’s Auroracoin – show this payment method has potential. 

2015 deadlines for your diary:

1st January – PCI DSS v3 compliance regulations active

1st March – EU cap on interchange fees begins in UK

30th June – deadline for PCI DSS v3 compliance regulations

1st October – EMV migration deadline in the USA

How will retail payments change in 2015? Influential trends set to shape the industry

What’s shaping the payments industry in 2015 – and what developments should retailers look out for? Kevin Burns, head of solution architecture at Vodat International, shares his predictions for this year’s hot topics.

1. Mobile payments – this has been on the radar for the past few years, but Apple’s entry to the mobile wallet market in 2014 could be a shot in the arm for other mobile payments providers. Following a successful trial in the US, Apple is set to roll out the service to UK iPhone6/6+ users this year – could this finally take the mobile wallet mainstream?

2. E-money – the use of pre-paid cards linked to e-money accounts is expected to explode in 2015, part of consumers’ continued migration away from card towards card payments. Facebook is already looking to capitalise on this trend by launching an e-money transfer service in Europe.

3. Social payments – already common in countries including China and Korea, a number of social media apps are developing the capacity to transfer money and facilitate transactions. Messaging app Line was the first to go live with this service when it launched Line Pay last year.

4. Contactless payments – 2014 was the year in which contactless took off among consumers, and this will continue to accelerate this year. Retailers not able to process contactless payments will need to move this issue up the agenda in 2015; at the end of the year, all POS terminal deployments will be required to feature contactless and NFC enabled capabilities.

5. Wearable technology – 2015 will be a major development year for the incorporation of payments into wearable technology, spurred on by the launch of Barclaycard’s contactless wristband. Apple may help to drive the use of this technology with its Apple Watch.

6. Payments cybercrime – a number of major retailers including The Home Depot, Target and Staples fell victim to card data breaches in 2014, as payments systems become increasingly targeted by cyber criminals. Businesses will need to up their game to protect their reputation in 2015; 45% of shoppers won’t use a retailer that has suffered a data attack.

7. Data encryption – to counteract the rising threat to payments systems, retailers are turning to data encryption solutions such as Vodat’s Unified Payment Service to protect valuable customer information processed through card transactions. New PCI council legislation introduced in January will accelerate this movement.

 8. Biometrics – in order to take customer security to the next level, more technology companies and financial organisations are partnering to investigate incorporating biometrics into the payments process. Apple, MasterCard, Fujitsu, Visa and Samsung are among the brands already exploring biometrics, and it is anticipated that 5.5 billion people globally will use biometrically enabled technology by 2019.

9. Omni-channel retail – it’s real and it’s on a high street near you. Retailers have joined their channels using the latest ERP integrations, now they’re working on their payments to match. Key to delivering success will be tokenisation – particularly having the same token irrespective of channel.

10. Digital currencies – 2014 was the year of the Bitcoin debate, which proved somewhat inconclusive. However, success for other alternative currencies – such as Iceland’s Auroracoin – show this payment method has potential. 

2015 deadlines for your diary:

1st January – PCI DSS v3 compliance regulations active

1st March – EU cap on interchange fees begins in UK

30th June – deadline for PCI DSS v3 compliance regulations

1st October – EMV migration deadline in the USA