By Ian Butler, Head of EU Security and Customer Servicing Products
Let’s catch our collective breath.
What a year for the payments industry it’s been, with some planned changes and a heck of the un-planned variety too.
With a global pandemic encouraging – or for some, forcing – people to avoid cash, we saw contactless spending limits increased across Europe.
Mobile payments and digital wallets that were gaining in popularity with the younger generation suddenly catapulted from the ‘nice to have’ to the ‘need’ bucket for many of us, and are now engrained in everyday use.
The industry is evolving at light speed, and it won’t slow down next year.
So here are the payments trends you’ll see in 2021.
1. Digital Payments: Consolidation of the New Normal
We’ve seen the move from cash to digital payments we were expecting over the next five years in just six months. What new opportunities does that open up for our new-to-digital businesses? Some of them may never have wanted to go digital, being a cash-only business until 2020, but now find themselves with online payments, a Facebook page, and offering ‘click and collect’ service. It’ll be interesting to watch how these businesses continue to mature and whether they sustain the light speed pace they needed to adopt this year.
2. PSD2 SCA (Secure Customer Authentication) deadlines and rollouts starting 31 December 2020
It’s a busy time for everyone in the payments ecosystem and businesses need to understand the impacts of the new rules. The introduction of Strong Customer Authentication for online transactions is about to bring EMV 3DS to life, a much needed upgrade to the original 3-D Secure. Acquirers are rushing to support all the possible exemptions, and make sure their systems are applying the rules correctly, and issuers, who have the ultimate say on whether to authorise a transaction or not, are starting to put their systems live. And, of course, there are all the new Open Banking market entrants rubbing their hands together with glee at the disruption this has caused their established competitors, whilst they wait with their new Account to Account payment and Account Enquiry tools which will be used to build the next generation of payments tech.
3. mCommerce and InApp payment
A side-effect of PSD2 SCA is the high speed at which the latest versions of EMV 3DS have been rolled out. These new versions are able to work with mobile phones to pass much more data to the issuer, which should mean fewer 3-D Secure challenges for shoppers and more instances of frictionless checkouts.
4. Secure Remote Commerce (SRC)
At long last we’re starting to see more coverage on the hotly anticipated Click to Pay programme, based on the EMV SRC Specifications, and it’ll start popping up on the major UK and European retailer websites in 2021. You’ll be able to register the cards you want to use once with your issuer, and then experience a common checkout experience wherever you’re shopping and see the new Click to Pay logo for a safe, fast, and efficient purchase no matter which device you’re using.
5. Growth in Buy Now Pay Later (BNPL) solutions.
With as many benefits to the consumer as the retailer, it’s no wonder we’ve seen the Buy Now Pay Later market grow significantly. Indeed at Elavon, we've partnered with LayBuy to offer one such solution to our customers so they can give consumers looking to balance their budget an additional way to purchase when they get to the till. With LayBuy, the customer pays the same ticket price spread out over six weekly interest-free instalments. The cost is borne by the merchants who typically see increased basket totals, reduced abandonment at the point of purchase and an uptick in returning customers.