We may have seen the introduction of new £5 and £10 notes and a £1 coin in 2017, but cash is losing its crown to the younger generation, with more than one in 10 people aged between 25 and 34 using notes and coins no more than once a month last year, according to UK Finance.
This trend is likely to grow into 2018 as alternative ways to pay rise in popularity. Following on from the success of contactless phone payments pioneered by the likes of Apple Pay, more blue-chip brands are, for example, incorporating contactless technology into wearables, such as fitness and smart watches, but the boundaries are constantly being pushed.
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Children are now using biometric payments as part of their everyday school life and Peugeot-Citroen recently launched car keys embedded with a contactless Barclaycard chip. There are few limits to making everyday items smart and we expect to see further innovations next year.
Security under the spotlight
Under the spotlight for 2018 will be security, an area intensified with the upcoming GDPR. In 2017, we saw some high-profile security breaches which forced the issue of security further up the boardroom agenda and 2018 could see a significant rise in requests for personal data to be deleted. Organisations will be able to benefit from consumer technologies that include biometric features such as facial recognition, fingerprint and iris scanning to provide additional reassurance to customers purchasing their goods and services. These technologies providing new heights of security may help prevent a knee-jerk reaction of consumers requesting their personal data is deleted; data that provides valuable insight to organisations helping them create a frictionless customer experience and informing the shape and launch of successful new products.
AI to enjoy significant growth
Finally, an area we expect to see significant growth in 2018 will be AI and machine learning. This is technology evolving at lightning speed and cutting-edge payment providers are continuously exploring new applications for its use. Through AI and machine learning, for example, organisations will not only be able to identify individuals who are falling behind on payments but their systems will be able to intelligently tailor and time communications to them based on what they know has resulted in action in the past.
And if you add chatbots like Alexa and Siri into the mix, you can find a way to make more transactions online which will reduce the volume of calls into contact centres – calls which are more costly to process. We expect to see dramatic leaps forward with fraud prevention, know your customer and anti-money laundering as these rules-based systems leverage deep learning capabilities.
2018 promises to be a ground-breaking year for the payments sector and, as the evolution of technology continues to rocket, it’s tempting to try and wager what our predictions might be for 2019.
Andy Davies is products development and strategy director, Pay360 by Capita.
