Having given my overview of the top 2015 payments topics it’s time to take a look at what I think will be coming up in 2016. In general 2015 was a year when big ideas started to take shape and I’m hoping that 2016 will be the year that we see those ideas developed into real solutions. These are the top 5 things I think we’ll see over the coming year:
1. Gearing up for PSD2 – strong authentication and identity management
As PSD2 starts to get implemented in national laws, customer authentication is going to become a more fundamental aspect of the payments process: it will be needed more frequently and will need to be more robust using multiple factors for re-authentication. In addition authentication will be required to support the open banking and payments APIs currently being investigated.
2. The consumer/bank interface will be opened up
Another PSD2 initiative is the access by regulated, third parties to bank accounts for information and payment initiation. Access to this data could clear the way to the development of innovative solutions that give better services to consumers based on their real financial activity.
3. ACH push payments starts to stem the rise in debit cards
The widespread adoption of mobile devices means that people are now empowered to make push payments from their bank accounts using services such as Zapp and Pingit: it’s low-friction for the customer and low-cost for the merchant but has yet to make much impact in consumer to business payments – 2016 could be the beginning of a shift away from debit cards to more mobile-friendly alternatives, especially if concern over the security of contactless cards starts to erode consumer confidence.
4. Updates to Internet security cause confusion and failures
2016 will see the implementation of some significant changes to security protocols used by Internet applications. Products accessed via the internet will see new minimum standards for both digital signing and point-to-point encryption. Those who don’t update software and browsers as necessary are likely to be unable to access systems – for payments this is particularly significant for submissions into Bacs.
5. New banking providers get up and running
The launch in 2016 of a number of new and de-merged entrants will give people more choice as to where and how they bank. It will be interesting to see both how these new players fare and how the established brands react.
While those are my key predictions for 2016 we might expect to see other significant trends. There is likely to be a continued drive for regulation in payments and banking. Fintech which was a big buzzword in 2015 may become more diluted as the breadth of what’s covered is expanded to include financial supply chain, identity-proofing and secure telecommunications.
I’ll be expanding on all of the trends I’ve identified over the coming days – so please do check back! It certainly looks to be another interesting year – one I hope where talking becomes action!