Looking back upon 2015, it seems that it was the year in which payments went mainstream. We saw ApplePay go live, closely followed by SamsungPay, in the US and Korea, and before we knew it, millions of smartphone users were tapping their devices at payment terminals across the world.
Of course, we cannot yet claim that alternative payments have been forever revolutionised, but it would be equally inaccurate to understate the enormous economic and cultural shift that has taken place in and around the industry. So what can we expect to see in 2016?
While a repetition of 2015 is certainly unlikely, instead I would predict developments that may be even more important, triggered by the combined impact of increased competition and regulation designed to harness game changing innovation.
For instance, let us start with individual banking apps which are due to be replaced by centralised platforms which will collectivise our entire financial lives. Most of us hold current accounts, savings accounts, investments, mortgages and credit cards, often with different providers and with different access points. Pulling together these strands of our finances under one open API makes sense in terms of convenience and security, but also in terms of ease of financial planning.
This brings us nicely to the question of whether the traditional bank will be able to hold of the charge of the challenger bank. My advice would be to beware the sleepy giants – they are beginning to stir and many, though perhaps not all, will rise to the challenge.
In the field of Identity Assurance, mobile authentication is likely to continue making strides away from the more traditional means of authentication. Developments here will become increasingly critical to creating a fully developed identity assurance system. Hardware manufacturers will see new challenges from software PIN implementation, leaving a vacuum of opportunity for every other ecosystem player. The likely race to be first in the market will be a protracted struggle and new use cases will emerge, some of which will assist PSD2 compliance. Before long, authentication will become the adhesive that holds all access together.
Identity, and more specifically, federated identity will continue to be central to many discussions, despite the distinct lack of a single solution appearing on the horizon. Of course, privacy is likely to suffer in all of this. Since the dawn of the internet we have been sacrificing privacy against functionality and the demands of identity assurance will inevitably require further sacrifices.
Security mechanisms will also have to be reconsidered with the continuing decentralisation of authentication and payment functionality. As aesthetics and user experience come to the forefront of demand, security professionals will have to be creative as they are thorough.
The future is certainly bright for payments in 2016, and here at myPINpad we hope to be at the forefront of the change and innovation to come.
David Poole, Business Development Director at myPINpad
Image source: Shutterstock/Robert Kneschke