Transaction Trends

Jared Drieling

The world around us has become increasingly connected, and as such purchasing behaviors of consumers are evolving as well as the tactics merchants are pursuing to take advantage of this reality. For consumers, merchants and payment providers, the need is clear: a frictionless, efficient and pay anywhere, anytime platform. Unfortunately, for many incumbents with legacy technology, supporting digital and physical payments across multiple channels was a key hurdle in 2016. More so, the transition to EMV distracted attention and resources to developing innovative products that could tackle some of these pressing issues. As the industry struggled with EMV and faced legacy technological challenges, emerging players without legacy technology, such as WePay and Adyen, continued to take the market by storm and increasingly found themselves on the radars of many large acquiring entities.

However, the merchant acquiring community in 2016 started to evolve and  implement strategies to offset some of these market and competitive changes. In 2016, the acquiring community sought out innovative partnerships with technology related payment providers across data analytics, loyalty and rewards, shopping cart/eCommerce and fraud and security sectors. Acquirers partnered with the likes of Google, Apple and Samsung, they sought out strategic acquisitions, there was a range of developments across security especially in the tokenization sector and the industry witnessed some interesting developments in POS technology with the arrival of smart terminals.

The acquiring community clearly put a heavier emphasis on marketing themselves as more “integrated,” “omnichannel” or “multichannel” providers. In addition, the ability to specialize in a product and/or vertical was a key theme.

In 2017, we will witness more and more acquirers and other payment entities define themselves as technology providers versus payment providers, either in reality or through marketing, to showcase that they are an ideal payment partner for the changing merchant environment who can provide that seamless, efficient payment platform, anytime and anywhere for consumers. This is not just in our industry, but across many industries. Take for example Dominoes; the pizza company now calls itself a technology company as the firm explores text ordering and drone delivery. In our industry, beacons, geolocation, data analytics and biometric technologies are just a sample of technologies that could be components in a frictionless buying experience. In 2017, we will see the likes of Stripe gain more attention (maybe even an IPO in 2017), we will witness acquirers transform into “true” technology providers, acquirers will aggressively pursue data analytic opportunities, acquirers will become more specialized and finally, acquirers will become more and more involved with the developer community and software integrations.

In Henry Ford’s words, “if I had asked people what they wanted, they would have said faster horses.” Innovation in the industry will likely occur inside the payments industry and outside as the fintech sector merges and technology outside of the industry begins to be incorporated (i.e. voice technology for smart terminals). This will likely happen where we least expect it, and for merchants, innovative solutions could open up entirely new categories of business applications they were not even aware that they needed or wanted.

Jared Drieling is a Business Intelligence Manager, The Strawhecker Group