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What is next for the merchant payments’ ecosystem in 2020?

The way people pay is changing rapidly, thanks to technological innovation and digitalization. Society is becoming increasingly cashless as more consumers choose to rely on cards, as well as alternative payment methods.

At present, less than 50% of all payments in the UK are made with cash, and if this trend continues by 2026 it is predicted that this figure will drop to 21%. In 2019, mobile technology changed the way we paid, with m-Commerce constituting 56% of all e-commerce sales and an estimated $3.6trn in m-Commerce sales by 2021.

The changing payments landscape challenges everyone. For merchants, payments are no longer just a cost of doing business but can drive growth, if approached holistically. Currently, only 20% of merchants have a mobile payments app and only 40% have a mobile-centric payments website.

On top of that, there is a myriad of new technologies like Artificial Intelligence (AI), Machine Learning (ML), and biometrics impacting commerce & payments. The Internet of Things creates a seamless web of touchpoints, through integrated apps, smart devices, and integrated payments, making electronic payments even more convenient.

Instant & Mobile payments are poised to finally have their day thanks to APIs and open banking. New channels appear, seemingly overnight. In 2020, “Social Commerce” and “Voice Commerce” are looking likely to become part of our everyday life.  There will be more “Value Added Services”, including loyalty and coupon offers, that are seamlessly integrated into payment transactions. In this context, delivering a unified mobile payment experience is the new challenge in the battle for the consumer.

Omnichannel integration can be an overwhelming task for merchants. Over 50% of retailers are focused on creating a consistent brand experience across channels. Along the road towards optimising payments for omnichannel commerce, there are many questions for both payment providers and merchants. At MPE2020, the biggest European conference on merchant payments (Berlin, Feb 18-20 2020), over 140 inspiring speakers will provide unique insights on what payment providers are doing to help merchants to achieve frictionless shopping experiences.

How should the payment companies change their business models to adapt to the new era of instant & mobile-driven payments in 2020?

According to Jeremy Nicholds, CEO of Judopay, who will speak about the psychology of mobile payments at MPE2020: “If you’re looking to build a case for technology investment, explore your business growth goals and how this new payment technology can support these plans.”

The important question for incumbent players is whether to substitute, or adapt their legacy systems to cope with the new market standards & technologies?

Ruca Sousa Marques, CEO of Switch, who will cover the Interoperability in the Payments Industry in his speech at MPE2020 said: “There’s value in existing legacy systems—they’re still performing valuable actions! What’s needed though, is to decouple traditional monolithic architectures into microservices setups, ones that allow for interoperability between internal/external systems, thus accelerating integrations with 3rd party vendors for quicker go-to-market strategies. For this matter, a middleware is necessary to orchestrate communications through standardized data structures, avoiding any updates in back-office systems every time a new application is connected. In his presentation, he’ll propose a new model for adapting legacy infrastructures to new market standards (e.g. Mobile, PSD2, 3DS v2.0, APMs, Omnichannel), capitalizing on existent systems and preparing incumbent companies for the challenges ahead”.

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