All the innovation in technology and business administration naturally prompts rapid changes in consumer behaviors. It is becoming increasingly difficult to separate what will shape the future of payments from what is just a hype nowadays. However, close examination of the “innovation clusters”, known also as incubators for new technology aiming at consumer simplicity, now signals that an innovation in the payments industry is ready for prime time.
Hundreds of great ideas were introduced in 2011, but only a few have the right combination to get traction and scale in 2012. With that in consideration, here are a few predictions for the payments industry in 2012.
Mobile payments continue to gain populiarity
Mobile payments growth will continue without a doubt. The mobile industry is shifting into a faster gear, with smartphone penetration reaching global scale and well on the way to become the dominant connected device for over 2 billion people in the next few years. Add mobile innovations like the tablet, which has already become the fastest adopted electronic device in history, and mobile is really hitting its stride.
The true power of the connected mobile device lies in how dramatically it is changing consumer behavior and disrupting existing franchises. The Dubai-based coupon site Cobone can fill a restaurant in hours with a special offer, allowing local restaurants to skip the process of building a website. Payment helps accelerate these models through convenience and accessibility, while in turn, it is forced to innovate itself to keep up.
Fuller integration of online and offline commerce worlds
The blends of online/offline commerce have a lot of potential. In 2012, we will see a rise in virtual currencies and the ability to use them to pay for “real” goods. Imagine paying for groceries’ home delivery at Carrefour with PayPal. Even 15 years old, with no credit card or bank account, becomes an attractive target to retailers, who have already switched seamlessly between their online and offline lives and welcome virtual currencies with open arms.
Social commerce also has seen exciting developments recently that show more ways for the online and offline worlds to become more closely integrated. It’s not hard to imagine further innovations, such as person-to-person payments of non-cash currencies or creating massive fundraising movements. The possibilities seem endless and are incredibly powerful.
As our online and offline worlds continue to merge, the war of commerce will mostly affect the small merchants. They will need to adapt, while at the same time making sure the online world doesn’t drown them in fraud. Beating margins in this over-connected economy is not an easy task!
