How the Payments Space Is Rapidly Changing
It’s no secret how much change has been happening in the payments space. While the United States (and Europe) may not be quite as nimble as China has been in becoming the first nation to launch a sovereign digital currency, people everywhere are primed for a cashless society.
The Future is Tap to Pay
Visa and Mastercard saw 40% increases of this type of transaction over just two quarters.
“We think it’s the future,” Micaiah explains. “We think it’s smart.”
Another contactless option is using a mobile wallet, using a tokenized form of a credit card number. Whatever the method, “what we’re constantly hearing is that consumers want to handle less cash and … want to spend less time in retail environments,” Micaiah says.
Other countries happily jumped on the bandwagon. “Australia, I like to say, is tap happy,” he explains. Three-quarters of Visa transactions in the country are contactless. Meanwhile, in Canada, that number shoots to 95%. So why the delay with the U.S.? Back in 2016, reissuing cards with the contactless logo would’ve cost $35 per card so they were hesitant to take the hit. “But that’s changing,” Micaiah says.
Sometimes people might be concerned with security risks for tap-based or touchless payments. But Micaiah is quick to reassure. “The signal is encrypted — all the way back to the payment processor,” he says. Even if someone did read the card, without access to the cipher it can’t be decrypted.
The Drive for New Models
Executive Director and Head of CMT Sales for Cognizant’s ATG, Daniel Hansen, has spotted other business trends which are impacting payment solution models. “We’re really seeing a big shift to this buy online pickup model,” he says. Companies that lack the right infrastructure or agility to change often aren’t making the transition quickly enough to keep pace with consumer demand.
Adopting new models means changing infrastructure. That means new channels for customers to communicate with sellers and the need for sales transaction support. “We see our clients often doing it with the Salesforce platform,” Dan says, “using solutions like B2B, B2C, Salesforce CPQ, Billing and Chargent.”
The rise of e-commerce and mobile offerings perpetuate the need for a viable option for accepting payments in the back-end. “It’s been fascinating to watch all the new channels that people are using to sell their services and physical goods, as well as new campaigns,” Dan says. “One of the components is going to be collecting payments, whether that’s just a one-time transaction or it’s being able to support longer-term recurring payments and subscription models.”