In Paysafe’s Lost in Transaction: Payments Trends 2018 report, consumers in the US, Canada, the UK, Germany and Austria were questioned about their payment preferences.
Looking at current payment methods, the study from the online payments company found that the UK was far ahead with its adoption of contactless payments, with 54% of respondents having paid using the method in the past month.
Germany saw just 9% of users and the US ranked lowest with 3%.
Consumers are clearly still getting to grips with these methods, but there are already plans to move into the next wave of payments.
The Paysafe survey looked at the arrival of three new methods.
Frictionless, also known as invisible payments, is the type of transaction used when paying for services such as Uber, where account information is only entered once and automatically accessed to make future payments.
Voice-activated or conversational payments involves the use of systems such as the Amazon Echo, where customers will state aloud their desire to make a purchase.
And then there are biometric payments, where a transaction is completed through recognising a customer with a process such as fingerprint scanning.
With the low-usage results from each country combined, there is obviously a lot of concern still felt around making payments using these methods.
Respondents said that payment types that were too risky and unknown to use at present were biometrics (30%), frictionless apps (34%) and voice-activated apps (32%).
“The convenience of payments needs to meet the demands of the end user,” he says. “To make this work seamlessly, companies need to have a good interface. Companies that don’t produce this will suffer.”
Kornitzer believes the wider trend of customer personalization will take off with the use of greater levels of technology, which will be able to cater to specific customer needs.
“We will see a move towards mass personalization,” he says. “Customers want clear and personal services like those that were provided by smaller shops in the past. AI [artificial intelligence] allows that personalization to be regained.”
Sebastien Slim, head of innovation and marketing at payments solutions provider HPS, says it is what the customer wants that pushes the developments of new services.
“The latest trends set the agenda in digital,” he says. “The next tranche of changes we see will use invisible payments. Within these payments, there is no actual transaction process seen; the customer’s decision to purchase also completes the transaction.”
There is a wider industry move towards straight-through processing with payments, according to Paysafe’s Kornitzer. The result of this is that companies need to find new ways to bring about the best levels of customer service.
“The use of AI will bring about greater levels of transaction automation,” says Kornitzer. “Customers can set up payments and put in rules for alerts on exceptions in payments. For example, they can set a boundary for bill payments and be notified if a payment comes in at unusually high or low.
“Otherwise, transactions are processed straight through, without any intervention from the customer.”
Of all the emerging payments methods, the one gaining the most interest is the use of voice payments.
In contrast to the Paysafe report, Mastercard’s study Is Anybody There? Giving Conversational Commerce a Voice found that customers who already have a device will be more open to using it to make payments, although it does forecast that voice payments will take time to be accepted by a wider consumer base.
Research by Mastercard found 87% of US consumers are aware of the use of voice and text, and 66% have used it. Further, 19% of consumers with an Amazon Echo have used it to make a purchase, and a further 33% plan on doing so in the coming year.
According to research earlier this year by Voicebot.ai, 47.3 million American adults have access to a smart speaker, and Amazon dominates the market with 72% of the overall share.
The US market is proving to be ahead of the curve, with only 21% of EU consumers stating in the Mastercard survey they have made a purchase through this channel.
A further study by consultancy group OC&C, titled The Talking Shop: The Rise of Voice Commerce,forecasts $40 billion will be spent through voice commerce in the US by 2020. For the UK, it puts the number at $5 billion. Although impressive, the numbers still only represent around 6% and 3% respectively of online spend in each region.
While the numbers are big, there is a lot that companies need to do if they want to beat their competition to winning market share.
“Making things as easy as possible for the customer does require some legwork on the side of the business,” says Kornitzer.
“For example, Capital One in the US found there were 2,200 ways for customers to ask verbally for their account balance. They had to set up their voice recognition technology to understand them all.”
Slim at HPS says: “Invisible payments will require some tokenization, which will see customers’ actual account numbers being replaced with a series of random numbers. This will enable the payment to be processed without their details being used.”
For any new process to take off, it requires key elements being met.
Kornitzer says: “Solving needs, giving back time and reducing stress are the elements that create consumer value and engender loyalty. They are key to driving change in the payments platforms.”