But one thing to be thankful for is the changing way payments are viewed by retailers today. No longer a “cost of doing business”, they’re increasingly seen as a “strategic lever”, according to 451 Research Director, Jordan McKee.
“There is a deeper understanding that payment infrastructure serves as a critical digital experience factor that directly influences customers' likelihood of converting and returning,” he argues. “This is resulting in an enhanced focus on the role of payments in powering digital commerce experiences.”
So what new opportunities and trends are likely to shape the landscape over the coming 12 months?
Arguably the biggest regulatory change in decades, PSD2 and its Open Banking provisions is already stimulating a new wave of innovation in the industry. PSD2 mandates that traditional financial players share customer data with approved fintech providers via open APIs, in a move which is helping to drive new products and services. One particularly attractive option for retailers is to offer customers the chance to pay by instant bank transfers rather than card. As we’ve mentioned in the past, this could reduce payment processing costs for the merchant.
The new regulations are also likely to force a rethink on the part of the banks in terms of how they view these disruptive new service providers, leading to greater collaboration. According to Capgemini, over a third of banks are looking to “anchor” themselves in these new open ecosystems.
Customers go digital
A longer-term trend that will continue to influence the industry in 2019 is the increasingly digitally savvy consumer. Shoppers today want seamless experiences across bricks and mortar and online channels, where they flit between multiple screens and devices. We can’t underestimate the impact of mobile and social-centric millennials and even younger “Generation Z” consumers.
“Not only is Gen Z nuanced in its banking preferences, it is upping the ante. As GenZers enter the workforce and their financial needs become more complex, they will radically reshape payments,” says Accenture. “They are likely to be the first generation to forgo the leather wallet for the digital wallet.”
For retailers, enabling Apple Pay and Google Pay is a relatively quick and easy win. But more thought will need to be put into creating omnichannel shopping experiences. Your payments partner is key here. Can they offer true omnichannel capabilities designed from the ground-up with features like tokenisation to enable a single view of the customer?
Security is paramount
Amidst all this innovation it will be more important than ever for organisations to design security and risk mitigation into their strategies from the very start. This is mandated by the GDPR, as well as PCI DSS and PSD2, but also just makes business sense. A major card breach or high fraud levels can decimate the bottom line and brand reputation.
The bad news is that the growing cybercrime economy has made it easier than ever to make money from data theft and fraud. Data breaches are endemic, while 2018 saw a spike in global digital skimming attacks that steal card details the minute they are entered into infected payment pages. Separately, new research estimates that card-not-present losses are set to hit $130 billion (£102bn) between 2018-23. PSD2 mandates strong customer authentication for many transactions, which will herald a new set of challenges for e-commerce providers wanting to minimise fraud losses without impacting the customer experience.
As with this and all of the above trends, your choice of payments partner will be key to a successful 2019.