The end of the year provides a natural opportunity to step back and assess where we stand, whether professionally or personally, and consider where we are headed. Rather than dwell on past history, we have chosen to focus instead on the trends that we expect to drive the payments industry in the coming year.
EMV opens the door for new retail payment models
The number one US payments headline of 2016 – the ongoing migration to EMV and the challenges presented for all parties involved – continues into 2017, thanks to Visa and MasterCard’s recent decision to extend their pay-at-the-pump compliance deadlines into 2020. Nonetheless, the point of sale (POS) changeover has already opened the door for consumers to explore new payment alternatives. Broad-based solutions like Apple Pay and Samsung Pay continue their slow build, with Chase Pay poised to make a splash early in 2017. Meanwhile, Wal-Mart and Kohl’s have rolled out high-profile, retailer-specific wallets with checkout convenience and reward points as hooks. Expect more players to follow, making the POS environment even more complex.
Hackers get smarter and more opportunistic
Here’s another natural continuation – it’s no secret that fraudsters continue to get more sophisticated, requiring financial institutions’ to continue to make investments to stay a step ahead of them. Of course, the added security of tokenization was one of the driving factors behind EMV. But while trolling for the next big breach, hackers are more than happy to continue focusing on the low-hanging fruit. Retailers that are not yet EMV compliant (and there are plenty of them) are an obvious target. Additionally, with their deadline extended to 2020, if gas stations fail to take action, those outdoor, unattended automated fuel dispensers risk becoming hacker hangouts.
Self-service drives new ATM models
Recently released Federal Reserve data confirms that cash – and by extension the ATM – is at no risk of extinction. At the same time, the buzz over Amazon Go’s new checkout-free grocery store is but the latest example of the trend toward self-service. Together these forces point to renewed innovation in the ATM model. Solutions like cardless cash and biometric authentication are already in the market and are poised for increased traction in 2017.
Keeping more than your head in the cloud
Cloud computing has already reached the mainstream, including for uses that were previously deemed too sensitive for such offsite transmission. A natural extension to this model is Testing as a Service (TaaS), which offers a more efficient and cost effective avenue to leveraging state-of-the-art payments software testing. We can expect to see more of it in the coming months.
Increased investment in modern testing solutions
These trends all reinforce the notion that the payments space is nowhere near settling into a state of comfortable stability. Realizing this fact, financial institutions and payment processors alike will invest in next-generation payments testing solutions – leveraging techniques like automation and virtualization – as a path to improving product quality as well as managing back-office costs.