Recap of Payment Trends in 2018

 December 12th, 2018

2018 was a truly innovative year for the payment industry and all businesses in general. As the year draws to a close, we would like to give a short recap of a selection of payment trends in 2018 and the effect they have had on the payment landscape. We have selected 6 payment trends to look at that had been predicted to have a large impact at the beginning of the year. Did they all meet their expectations or are some still struggling to find their place in the modern payment landscape?

Contactless Payments


In order to find high user acceptance and adoption, new technologies and innovations have to offer obvious improvements in comparison to the established methods. Contactless payments excel at providing a fast and effortless way of paying without even having to type in a PIN for smaller transactions. This convenience, together with a strong support from all payment services, propelled contactless payments to one of the biggest trends in 2018.

Worldline reports that in Belgium, the number of contactless payments has increased sevenfold compared to the previous year and a similar trend can be seen in other countries as well. According to MasterCard, contactless payments showed a 95% increase in the UK, now representing 46% of all in-store transactions already. Additionally, all point-of-sale terminals in Europe are supposed to be compatible for contactless payments by 2020.

Mobile Payments and E-Wallets


A prevalent prediction for 2018 was a rising popularity of mobile payments and e-wallets. Mobile payments have indeed risen to an all-time high: during the whole period around Black Friday and Cyber Monday for example, around 66% of all ecommerce sales in North America have been done through a mobile device, whereas back in 2017, mobile only exceeded desktop on some peak days.

Although mobile payments have proven themselves to be a force to be reckoned with, the adoption and usage of mobile wallets have not lived up to their expectations. According to a recent survey from The Financial Brand, 71% of consumers prefer paying with either credit or debit card, which now often offer contactless options as well, whereas only 1% listed mobile-wallets as their favorite way of paying.

PYMNTS.com reports that, in the US, Apple Pay has been used at least once by 29.4% of all iPhone users, whereas Android Pay reached even less with 13.3% for all Android users. The consumer tends to stay with their already established payment methods and is reluctant to adopt a new one without any obvious incentive.

Omnichannel Strategies


Nowadays, a crucial part for a successful business is having a smooth omnichannel strategy. Although physical retail is currently still accounting for around 90% of all sales (at least in the US), ecommerce sales are continuously rising. Additionally, many people prefer browsing for their desired item online, but ultimately buying it in store. These factors reinforce the need for all businesses to create an omnichannel strategy to attract as many new customers as possible.

Biometric Authentication


With PSD2 hitting the European payment landscape earlier this year, many saw a big opportunity for biometric authentication methods. As the new regulations aim to reduce payment fraud by requiring an additional authentication step, biometric methods offer an effective alternative to regular passwords. They can’t be forgotten, are harder to crack, and are comfortable to use. With the majority of smartphones coming with integrated biometric authentication methods nowadays, the general user acceptance has been steadily rising thanks to the familiarity with the technology. acuity predicts that by 2022, over 1 trillion mobile transaction will be authenticated annually with the use of biometrics.

High Adoption of Digital Peer-to-Peer Payments


In the age of digitalization, it is only natural that more and more people love to split bills without having to bother with cash and instead do so with the use of digital P2P payments. These types of payments are especially popular amongst Millennials, 75% of which have used them in the past and 49% of those who did use them on a regular basis. The other generations show a very high adoption as well, with 69% of Gen Xers and 51% of Baby Boomers having used P2P payment-apps already.

The rising interest and usage of P2P payments caught on quickly, which caused many popular messengers like WhatsApp, WePay, or Facebook Messenger, to adopt similar P2P payment possibilities into their chatting software. With their ease of use and the help of a strong word of mouth, digital P2P payments are quickly becoming the most popular way of exchanging money between friends, family, and other acquaintances for all kinds of payment – be it the simple split of a restaurant bill or the monthly rent.

Surge of Payment Platforms


All of the points mentioned so far, together with the everchanging payment market and constantly growing customer demands, force businesses to be able to quickly adapt to any new technologies or innovations. However, more often than not, businesses are struggling to get rid of legacy technology that prevents them from introducing those innovations in a timely manner. Having recognized this need, more and more payment players have started to operate as platforms in 2018. “Via APIs aggregation, they now bundle offerings from different providers. This allows businesses to use more services and easily follow a multi-supplier strategy,” – comments Manuel Sandhofer, VP Sales and Partner at optile. Switching to a platform model allows payment providers both to be more flexible in their offerings, noticeably reduce technical effort for businesses, and deliver an even smoother payment experience.

""Via APIs aggregation, they now bundle offerings from different providers. This allows businesses to use more services and easily follow a multi-supplier strategy" - Manuel Sandhofer, VP Sales and Partner at optile"


While some payment trends in 2018 haven’t lived up to their hype (yet), most new technologies and concepts have been incredibly successful. Contactless payments took off and are steadily rising, biometric authentication for mobile payments is slowly becoming the norm, digital P2P payments have become popular amongst all generations, and payment platforms help businesses to introduce new technologies and adapt to the growing customer expectations. All in all, 2018 has been an innovative year and customers seem eager to adopt new technologies that make their lives easier and more comfortable.

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