For nearly a decade, the payment market has been one of the most interesting and active technology spaces from every perspective: financial services, consumer electronics, security, privacy, and more. That interest and activity reflects the importance of payments to every facet of business; payments must flow seamlessly and securely for commerce to occur. Payments are the oil for the global economic engine.
Payments have always been challenging when it comes to technology strategy. It is a complex market with thin margins and incredible scale. The predictions offered in this IDC FutureScape for worldwide payments come from a combination of recent research coupled with decades of experience from the authors. The predictions are aimed at helping technology buyers understand the challenges facing the payment market as well as how to adjust their strategies to face those challenges.
IDC Financial Insights' 2018 predictions for the Worldwide Payment Strategies research area are discussed in the sections that follow. They are listed in no particular order:
Prediction 1: In 2018, Financial Institutions Will Allocate $6 Billion to Internal Resources to Handle Transforming Their Payment Systems.
Prediction 2: In 2019, P2P Transactions Worth a Total of $6.0 Trillion Will Be Made Worldwide Using Mobile Devices.
Prediction 3: DLT-Based Networks Will Be Launched Within the Next 24 Months in 25% of Global Transaction Banks — in Particular, to Facilitate KYC, Accelerate Supply Chain Finance, and Drive SME Lending — But Blockchain Payment Systems Will Not Be a Priority Area.
Prediction 4: In 2018, More than $150 Billion Will Be Spent Through IoT and Connected Devices.
Prediction 5: By 2021, 75% of Enterprise Point-of-Sale Vendors Will Have Begun Significantly Re-Architecting Their Solutions to Meet Rising Expectations for Current Omni-Channel Capabilities and Customer Experience Expectations.
Prediction 6: Despite the Lack of an Equivalent Regulation to PSD2, by 2021, 90% of Non-European Banks Will Have Moved in a Similar Direction to European Banks in Terms of Sharing Data via APIs, But They Will Have Done So for Competitive Reasons Rather Than Regulatory Ones.
Prediction 7: Corporate Banks Will Invest 15–20% More in Big Data/Analytics in 2018 than in 2017 — $2.2 Billion in Total — in Their Efforts to Move from a Transactional to a Data-as-a-Service Business Model, Offering Real-Time and Predictive Analytics on Fraud, Compliance, and Scenario Modeling.
Prediction 8: By 2019, 70% of Standalone Mobile Payment Players Globally Will No Longer Exist in Their Current Form; Through Natural Evolution, Mergers, and Acquisitions, Mobile Payment Players That Are Showing Promise Today Will Have Transformed into Full-Fledged Financial Services Ecosystems.
Prediction 9: By 2021, All Major Payment Service Providers Will Interact with Digital Identity Marketplaces Used by Consumers and Businesses to Self-Govern Private Data Sharing and Use, Allowing Data to Be Uploaded for Payment Companies to Access via a Subscription Model.
Prediction 10: In 2020, 25% of Card-Issuing Banks Will Use Micro-Location for Enhanced Security Through a Combination of NFC and Beacons to Satisfy Mutlifactor Requirements to Secure Payments, Such as at POS and P2B.
To register for the on-demand web conference on these ten predictions or to learn more about the IDC FutureScape Web Conference Series, please visit: https://www.idc.com/events/futurescapes
You can find full context around these predictions in the newly published document, IDC FutureScape: Worldwide Payments 2018 Predictions (US # 41798817) on idc.com.