The payments industry is one that has been growing at an incredible rate in recent years. Current forecasts predict that it will grow by 6% annually for the next five years. There are few other industries in the world that can match such a high level of consistent growth.
There are changes every single year, though. 2016 is no exception, with the rise of such technology like virtual terminals and virtual currency. This article is going to focus on the major trends impacting the industry in 2016.
Virtual Currency is Still Coming
By far the biggest change in the payments industry is with virtual currency. The reveal of the founder of Bitcoin made this something of a credible currency. Although virtual currency still has a long way to go, it will continue to take major steps forward.
More and more businesses are choosing to accept Bitcoin as a form of payment. As virtual currency continues to advance, there's no doubt that it will make big waves across the world.
Online International Payment Platforms are Challenging Banks
Banks rarely offer a good deal. This is why so many companies and individuals are looking towards alternate online international payment platforms. The big problem people have is that they are attempting to transfer money internationally, which is still inexplicably expensive.
2016 will see the payments industry innovate, as new companies seek to disrupt it. There are already organizations like WB21 that are offering flat rates on international transactions. These newcomers are providing better rates than the banks, with the same level of convenience.
The only barrier to these new platforms is visibility. Only people actively looking for them are likely to find them.
Mobile Payments Will Continue to Take Charge
Mobile payments have become an established part of the payments industry in the last five years. The problem is they have never really managed to take charge. They have always fallen short, but this year will be the defining year for them.
The reason for this is due to Apple Pay. They are launching their platform throughout Europe at some point this year. Most speculators agree that the entry of such a big name into this lucrative market would mean that it will become more likely that providers will work together to make a unified payments platform.
Google is also expected to compete, but they are focusing on alternate ways to make mobile payments. For example, they are trying to make it possible to make payments from watches, bracelets, and even rings.
Security is Becoming a Concern
The payments industry has to take security more seriously than any other industry, since there's so much capital at stake. Security will be the continuing trend that defines 2016 for the industry. But the industry is innovating in this respect.
Right now, security is spread out across lots of different methods, such as PIN, password, and fingerprint. What they all have in common is the fact that they have the potential to be expanded. This simple innovation will see two-factor authentication brought in.
One example that the industry is working on is finger vein scanners. Such innovations are aiming to improve security, without making things inconvenient for users.
Blockchain Technology
One piece of technology that has the payments industry excited is blockchain. But what is blockchain and what can it do?
This is the same technology that Bitcoin has been based off. In short, this is a database that records all Bitcoin transactions. These are long data blocks that are encrypted and stored in a way that ensures they can't be tampered with.
Blockchain technology is fast and cheap, and it can be put to other uses. Right now, the industry is working on a way in which the trusted third-party common to all financial transactions can be replaced by blockchain. The fact that it cannot be tampered with means that it would be just as effective, if not more effective, than a standard third party.
When Will these Innovations Appear?
Just because these trends are set to dominate 2016 doesn't mean that they are all going to be finished in 2016. Many of these trends and innovations are set to define the years ahead. They will be further innovated and other changes will appear. The fact is that these innovations should be watched closely by businesses, but right now they aren't critical issues.
Continue to monitor the payments industry and see what these trends could mean for you in the coming years. What do you think is the biggest innovation to hit the payments industry?