Over the past few years, payment technology has moved forwards rapidly – offering consumers a more convenient and streamlined payment experience. But where to next? According to a new report by Rambus, there's much to come.
A payment process that is carried out in the background, a context-based payment requires no direct interaction between the customer and merchant. A perfect example of this is Uber – whereby the app makes the payment for you.
If you're wondering where it will go from here, think in-store context-based payments. Given that the technology required is very complex, there are currently many variations being trialled (geolocation, communication, biometrics and computer vision to name a few). At the moment, there are a couple of early concepts that look promising. Google hands-free app enables consumers to simple say, "I'll pay with google" to complete a transaction. Whilst Amazon Go is set to enable customers to go in-store, pick up items and walk out – with their purchases automatically charged to their Amazon account.
As Dave Birch, Director of Innovation at electronic transaction specialist Consult Hyperion, said during an interview looking at the trends which will impact the way we pay in the next 10 years: "The most noticeable thing in the coming decade will be the way in which payments become to fade out of sight".
From fingerprints to facial recognition, apps like Android Pay and Apple Pay have been leading the way when it comes to biometric authentication. But software upgrades and product launches are likely to open up a whole new world of possibility – increasing the number of devices that support it.
Technologies like iris recognition, heartbeat analysis and vein mapping, to name just a few, are being touted as potential ways of progressing biometric payment systems. It is hoped that they'll increase accuracy, efficiency and security.
Indeed, recent research by Visa found that consumers across Europe have a preference for using biometric authentication when making payments.
Rise of the wearable
In the world of mobile payments, smart phones are firmly in the lead. But the advancement of wearables might soon change that, given that the wearables market is set to hit $34 billion by 2020.
Many wearables are currently based around health and fitness trackers. But manufacturers are now working on incorporating additional features (like integrating payment functionality) to make them an everyday essential.
Given that they are immediately available and require no rummaging around in bags and pockets, wearables offer a real point-of-difference over smartphones and contactless cards. So it will be interesting to see how they develop in the next few years.
As mobile technology improves, it's becoming clear that ease and convenience is not enough. Consumers want added value. And that's why certain mobile apps, such as Starbucks with their loyalty system, have done so well.
With over 3 billion loyalty cards predicted to have been provisioned to mobile applications by 2020 – it's only set to continue.
By 2020, consumers can expect a whole lot more. By recording past behavior and intelligently deploying user data, consumers could receive smart recommendations. And with the addition of augmented reality, consumers may be able to analyze product information and read reviews in real time – rather than having to research at home.