We are a mere ten days away from the start of a new year! The last two weeks we looked at the key payment trends of 2017 and the role that millennials specifically have had in shaping those trends. For our final blog of the year we decided to take a look at the trends and technology expected to rule the payments industry in 2018. From digital assistants’ rapid take-over to convenience-centered commerce reaching new levels to heightened demand for real-time processing, these are our picks—based on expert picks—for the trends and tech to watch in the new year.
Digital Assistants Abound
2017 kicked off the digital assistant-mania in a big way. Amazon, Google, and Apple have spent the year perfecting and marketing these devices with varying levels of success. With focus primarily on the iPhone 8 and X releases this year, Apple spent 2017 honed in on their mobile devices. However, the release of the HomePod, Apple’s digital assistant answer to the Amazon Echo line, is projected for early 2018. Amazon’s Alexa-enabled line of products is also projected to expand in the new year.
The 2017 holiday shopping season was a landmark success for Amazon’s Alexa. The Echo Dot and the Fire Stick with Alexa Voice Remote were the bestselling Amazon-branded devices and the bestselling products from any manufacturer in any product category on Amazon.com, with customers buying 2.7 times as many Fire TV sticks this year as last year.
The Echo Spot was sold out for the holiday season by the end of November, with customers able to pre-order the devices on a first-come, first-serve basis in 2018, which will directly compete with the release of Apple’s HomePod. The spike in demand for these digital-assistant enabled devices at 2017’s close means 2018 will be the year of the digital assistant—driven in large part by the continued importance consumers place on convenience.
Convenience (is still) King
Convenience in all aspects of the consumer experience has been vital in 2017, and this trend is only projected to grow in the new year. Amazon’s Alexa-enabled devices’ success demonstrate this desire most clearly. Users can order whatever they want with a few words, the payment is processed immediately and securely through Amazon’s tokenization processing and arrives at their doorstep two days later (or same-day in certain cities).
This desire for quick, safe, and hassle-free transactions has spread into all industries. Grocery stores have caught on to the gold-mine that is online ordering. Most chains now allow consumers to shop online ahead of time and skip the line by picking up their order curb-side. Walmart announced that customers will be able to pick up online grocery orders at 1,100 locations by the end of 2017 and double that number in 2018. This, paired with the continued success of Walmart’s Pay app, points to what Amazon has already mastered: the more quick, seamless, and convenient your payment and ordering options are, the more consumers you will attract and maintain in the long-run.
Earlier this month, Target announced their own Pay option, with the launch of the Target Wallet. Wallet will provide shoppers with an all-encompassing experience, integrating the existing Cartwheel app along with the ability to shop and pay through the app. The key difference between Walmart’s Pay and Target’s Wallet is the RedCard factor. Target’s Wallet will only allow payment with a Target RedCard, whereas Walmart’s Pay works with all major credit cards, brand cards, gift cards, and even cash pre-loading. The limitation is a calculated gamble on Target’s part, based out of the understanding that RedCard users spend an average of 50% more than other shoppers.
The mobile-pay competition that will continue to play out in the new year is in large part thanks to tokenization technology. But for 2018, tokenization will likely take on importance far beyond the payments sphere it has primarily thrived in.
The concept of tokenization is far from new; the idea of protecting an underlying credential through substitution has been around for a while. Tokenization in payments is particularly appealing for its protections to both the consumer and the merchant, because even if a token is compromised, the breach can be contained without needing to reissue the original credential (i.e. credit card or debit card). For consumers, this means that if a merchant is breached only the token associated with that particular merchant needs to be reissued. For merchants, as soon as a breach is identified they simply request to have all its tokens refreshed. “The window of opportunity for the fraudster is much smaller” according to PYMTs, since the window only lasts until the token is refreshed.
In light of the catastrophic breaches seen in 2017 by Equifax (as well as Uber and many, many more), 2018 will inevitably be a banner year for not just payment security but personal data security on the whole. Tokenization will be one of many technologies being implemented and encouraged to protect individuals and organizations alike in the new year.
As the speed and ease at which we order and pay increases, the demand for real-time transaction processing and reporting has grown. 2018 will likely see a great deal of advances in the speed at which we move and report money.
For businesses, the long-standing tradition of month-end reporting can be problematic in this high-speed market. For small businesses in particular, real-time reporting is becoming increasingly important. Armed with real-time data, accountants are able to provide better insight for small business spending and budgets that are typically much more lean and prone to constant changes. The demand for real-time data in all aspects of payments and financial reporting will be crucial in the new year.
Heading into the new year, it can be overwhelming to look at the frenzied speed at which payments and technology are changing and evolving. Fortunately, Pineapple is already equipped to help you stay ahead of the curve of these key trends. Our completely customizable solutions mean you can provide convenient payment options no matter the size or industry of your business. Tokenization? It’s already a crucial part of everything we do to protect our merchants and the clients they work with. We even offer real-time reporting to keep you current on all things processing.
This holiday season, we at Pineapple Payments are thrilled to look ahead at what 2018 will bring, and we look forward to sharing that ride with you, our incredible customers!