The Five Biggest Trends in Payments

Russ Jones

January 14, 2019

Russ Jones

All of the 2019 prediction stories got me thinking about the mega trends in the payments industry.

These are the year-over-year tectonic shifts in the industry that you can bet your company’s strategy on — maybe even bet your career on. In a landscape of trees, this is what the forest looks like.

Trend #1 – Analog to Digital

The multi-decade shift to digital payments cuts across the core payments systems. The checking system has largely replaced the paper check with the digital image of a check. The card system is using tokenization to replace plastic cards in our wallets with digital cards in our devices. Even the world of paper cash is being remade with cryptocurrencies that act like digital cash.

Trend #2 – Slow to Fast

New bank transfer systems around the world are increasingly helping end-users move money between bank accounts in real-time. In the U.S. market, two of these, Zelle and RTP, are now operational. The card system is also moving to real-time push payments to debit cards in order to better support disbursements and the gig economy.

Trend #3 – Bank to Non-Bank

Banks used to own the payments systems in most countries. With Visa and Mastercard now public entities, that’s no longer the case. PayPal, Alipay, WeChat Pay, Venmo, and telco-owned payments systems like M-Pesa, are increasingly managing (and monetizing) the payments flow between counterparties. And let’s not forget the rise of fintech firms that are nibbling at pockets of opportunity in financial services.

Trend #4 – Upmarket to Downmarket

Cloud computing, tablets, and app stores are increasingly delivering enterprise-class solutions downmarket for use by small businesses. A four-store boutique accessories chain now expects access to firm-wide inventory management, a unified customer database, private label credit, and cross-location commerce analytics — all without the need for back-office systems. Payroll processing is just another app. Size is no longer a determinant of sophistication.

Trend #5 – Specialized to General Purpose

Consumerization is bringing everyday consumer technologies into the world of business. In the world of payments, consumer devices are increasingly replacing purpose-built devices. In developed markets, commodity tablets are replacing cash registers. In developing markets, wireless technology is helping many countries leapfrog developed market payments infrastructure by decades. In B2B payments, industrial suppliers are increasingly side-stepping procurement and simply selling their goods using a general purpose website, product catalog, and shopping cart.

There are also trends specific to each of the different payment domains: the POS, remote payments, B2B, P2P, Bill Pay, and Income. Some trends are visible in one market and barely discernible in another.

But this is my framework for evaluating the largest trends in the payments forest. Let me know what you think!

Recent Payment Views

Payments Post #14: Wallet World – WWDC, VFC, Tokens, and the Future of the “Card”

Payments Post #13: At the Intersection of Tech, Regs, and Business Partnership

This month, Cici Northup joins regular contributor Justin Pituch to recap positive news in the form of fast payments growth, new fraud mitigation strategies, and evolution in cross-border transfers. All reflect, to varying degrees, the unique dynamic in the payments industry created by the intersection of technology, regulation, and new business partnerships.

read more
Visa Payments Forum Deep Dive: Visa Flexible Credential

Payments Orchestration: What Comes Next?

Orchestration providers have certainly come a long way, and can enable powerful capabilities and benefits for the merchants that employ them. This post explores some of the possibilities Glenbrook has been thinking about for where Orchestration (and even orchestration) can go next.

read more
Payments Post #14: Wallet World – WWDC, VFC, Tokens, and the Future of the “Card”

Payments Post #12: Lessons from Change

In this month’s Payments Post, we want to draw your attention to several recent fraud incidents that underscore the criticality of effective risk management to your business and the safety and soundness of the payments industry.

read more

Glenbrook Payments Boot CampTM workshop

Register for the next Glenbrook Payments Boot Camp®

An intensive and comprehensive overview of the payments industry.

Train your Team

Customized, private Payments Boot CampsTM workshops tailored to meet your team’s unique needs.

OnDemand Modules

Recorded, one-hour videos covering a broad array of payments concepts.

GlenbrookTM Company Press

Comprehensive books that detail the systems and innovations shaping the payments industry.

Launch, improve & grow your payments business