A typical transaction involves at least five parties: the cardholder, the issuer, the card scheme, the merchant, and the acquirer. After the cardholder confirms their purchase, the other four spring into action – usually as soon as they’ve hit the ‘pay’ button. But will it always be this way?
As we consider the future of payments, the consumer drive towards faster, more convenient commerce is resulting in a much more dynamic process.
In fact, the pay button itself may one day be rendered obsolete.
Removing all friction
Research from McKinsey identified ‘convenience’ as one of the main drivers for consumer purchasing decisions. Steps like having to punch in your name, card number, CVC, expiry date and address now feel like a chore that must be avoided at all costs.
However, by reducing the steps required at the checkout (or getting rid of them entirely), merchants can inspire a positive psychological response from consumers, encouraging them to spend more freely, without friction or hesitation.
What would it look like to lose the specific moment of payment?
We’re talking about invisible payments – those that happen behind the scenes. The most recognisable example of this is Uber. When you take an Uber trip, you don’t even notice the moment of actual payment. You just type in your destination, wait to be picked up and dropped off, and then forget about it. The actual payment part is pretty much invisible.
This Uber-like ‘invisible’ payment is still seen as somewhat of a buzzword, only reserved for those with unicorn revenues and grandiose expectations for the customer journey. Could it even work on a large scale? Will the pay button ever fully disappear?
The forecast for invisible payments
By 2022, invisible payments are expected to reach $78 billion in annual transactions, held back only by the cost and complexity of infrastructure integration, which will be more easily managed as time moves on.
Further backing the expected rise of invisible payments is the growing popularity of newer payment methods which run along the same vein.
Take digital wallets, such as Apple Pay, Google Pay and Samsung Pay, for example. These allow consumers to quickly swipe their phone (that they’re likely already holding in their hand) along a card terminal for a fast and contactless payment experience – even if they’ve misplaced their physical card or left it at home. For merchants offering this newer experience, it can aid the acquisition of new customers and promote longer-term loyalty.
Consumers across the globe are also getting more used to authenticating a payment using their biometric data. While most won’t quite be ready for constant vein or retina scans, plenty of others are happy to scan their fingerprint and face to pay via Touch ID and Selfie Pay.
Then we have the likes of Amazon’s Alexa and the Google Nest. They may currently be sat in living rooms across the world, reserved only for playing music or recounting the fact of the day. But, these devices are blurring the lines of the exact moment a consumer pays for goods or services, since the payment happens in the background.
Go, walk out the door…
… into the world of multi-dimensional payments.
Amazon recently raised a few impressed eyebrows when it announced the launch of its latest Amazon Fresh store in London, UK. When customers arrive for their weekly food shop, they can simply scan their phone, fill their bags, and leave. No interaction necessary. They ‘Just Walk Out’ – which also happens to be the name of the technology powering this model.
After Amazon proves the success and security of these stores, it will eventually sell the Just Walk Out technology to other supermarkets across the globe. And this type of effortless, invisible payment will likely go beyond the grocery sector, following a probable boom in consumer demand and cost-effective technology solutions to support it.
At this point, we’ll be a quantum leap closer to being in a world of multi-dimensional payments – where payments don’t happen at a specific place or point in time. You’re neither on one side of a payment nor the other, because it occurs in three dimensions.
Now, slow things down
A completely multi-dimensional payment experience that is simultaneously convenient and simple is not here yet. Or even soon.
Before it can happen, there must be a huge amount of complex technology development and a large combined effort from across the payments space. This will ensure that all the regular processes that take place during a transaction, such as the movement of data along the payment chain, authorisation, and fraud checks, will still take place without a hitch.
For now, merchants can embrace other types of frictionless payment, which can be lucrative for opening up new streams of revenue and reducing basket abandonment rates.
To find out how you can make the most of your payments process, now and in the future, talk
To find out more about what really happens once a customer clicks ‘Pay’, download our latest eBook: Beyond the pay button: Exposing the mystery of conversion.