19 Aug An overview report on next era of Payments processing
Payments is about transferring information from one party to another, and nearly every stakeholder in the industry benefits when that process runs on digital rails. Payments industry is an extremely complex industry and is going through a period of rapid transformation. BI Intelligence has published a report on the next era of payments processing. The report offers a high-level look at the payments industry – how it functions, who the key players are, and the trends shaping the industry. The report also explains payment-card processing, since the majority of consumer payments and transaction volume flow through the payment card processing system. It highlights the fact that mobile devices are changing the way we pay and in the coming years lot of developments will be done across payments through mobile devices.
Some of the key takeaways from the report are:
- Current year will be a watershed year for the payments industry – Payments industry is going through a rapid transformation as it is transiting to digital. Companies offering payment solutions are improving security, expanding their mobile offerings and building commerce capabilities which will give compel the customer to make purchases through mobile devices.
- Payments is an extremely complex industry – It is important to understand how the traditional credit and debit processing chain works and what roles acquirers, processors, issuing banks, card networks, independent sales organizations, gateways, and software and hardware providers play.
- Mobiles are becoming the go-to computing devices in payments – Payments is no excpetion as mobiles have heavily impacted the industry. Major companies are building mobile wallet platforms and in-store mobile payments in US is expected to grow from USD 120 billion in 2016 to USD 808 billion by 2019.
- Alternative technologies disrupting the processing ecosystem – Devices ranging from refrigerators to smartwatches now have payments capabilities and are expected to spur changes in consumer payment behaviors. Also, technologies such as blockchain are expected to change how consumer card payments are verified
- Mobile point-of-sale (mPOS) is going to have a massive impact on the payments hardware and software – By 2019, majority of the US retailers are expected to implement a mPOS device. The new mPOS devices are extremely cheap to purchase and terminal vendors are stocking the devices with software platforms that contain business management tools and even working capital programs. The software providers get an opportunity to sell their products directly to merchants.
The report also contains 9 infographics and diagrams that explain how card transactions are processed and which players are involved in each step.
