It’s no surprise to anyone in business that the world of payments is booming. However, as an ever-changing landscape it can be difficult not only to understand what the payments space actually entails, but where the world of payments is going—and moreso, how this will impact field service businesses specifically.
Thanks to the experts involved with WorkWave Payments and our recent market data, we are happy to share our insights into what we can expect from payments in 2020.
1. The demand for app-centric payments will continue to grow
It is estimated that more than five billion people around the world have mobile devices, and of that astonishing amount nearly half are smartphones or smart devices. Furthermore, it is estimated that Americans in particular check or use their smartphones an average of 52 times each day, according to the U.S. edition of the 2018 Global Mobile Consumer Survey from Deloitte.
With these numbers, it should come as no surprise that the mass consumer populous is becoming increasingly reliant on their mobile and smart devices. As a result, the manner in which sellers offer products and accept payments will follow suit and continue to not only accommodate consumer behavior, but shape it as well.
In fact, we have seen signs of this mobile-first and app-based payment world already taking over. From familiar, traditional banking apps to the “new wave” third party payment systems, such as Apple Pay and Venmo, app-based payments are becoming more convenient, customer-friendly, and integratable into other consumer apps. The presence of these functionalities will continue to set the standard of how consumers expect to be serviced via their payments, as well as mold their expectation of service-based companies being able to accommodate their preferred means of payment.
For service companies—especially those operating in the field—the ability to rely on a field service software that not only understands their customers’ habits but empowers them with the integrated functionality and features to best meet expectations, will prove to be a pivotal part of the overall service to their customers.
2. Redefining wallets is the way of the future
As we just discussed, digitizing payments is starting to fully shape the norm. But going cashless isn’t the only thing in the crosshairs of digitization; mobile wallets are also starting to regain some traction as of late. And as the trendlines and market data have been suggesting, this is not something we expect to lose steam anytime soon.
When it comes to mobile wallets and their relationships with consumers, things have characteristically fallen under two categories: open loop and closed loop.
Your open loop wallets are your cross-business payment enablers, such as Google Pay and Apple Pay; your closed loop wallets are strictly business-specific payment processors, like Starbucks and Walmart.
While these mobile wallet models have been around for some time, they haven’t necessarily been fully embraced by the consumer market in terms of the mass populous totally abandoning cash—or their physical wallets, for that matter—in exchange for an all-encompassing digital experience.
While this could be due in part to concerns around the security of these mobile wallets—especially with the highetened caution and uptick regarding cyber-crime and theft—it also stems from the very human nature of habit. Though consumers have been used to using the same credit cards via both their digital and physical wallets for years, the act of relying solely on their digital wallets has not been the norm.
However, now that consumers are slowly warming up to the idea of a completely digitized payment experience, their preferences are starting to take shape and increase the competition between open and closed loop models. For instance, open loop models provide the ability to purchase whatever the consumer wants, however they want; this is a flexibility factor that is nearly impossible for traditional, physical wallets to replicate. On the other hand, with the closed loop models consumers have access to the ever-coveted convenience factor of conducting the entire buying experience from an all-in-one platform.
As competition between closed and open loop models continues to mount, market data suggests the increased cultivation of proprietary payment products offered in-platform or app could come to fruition in 2020. With this, in-platform and in-app payment products can be expected to shape the direction of product and service development, integration approaches, technology selections, and more.
For field service businesses, these models characteristically haven’t had much of an impact on operations. But as noted, anything that influences consumer behavior will ultimately trickle down and impact what customers expect—even from their service providers. Because of this influence field service providers will want to pay close attention to the developing integrations and technology selections, specifically taking note as to how their software solution of choice can best accommodate these advancements. This allows the business to be on the cutting edge of payment innovation and ahead of the competition in terms of service offerings.
3. Paving the way for faster settlements
More often than not, people associate digital with quick. With all of this discussion around the digital advancements that we foresee on the horizon, it only makes sense that the settlement process would also see an improvement.
As many U.S. business owners can attest, it still takes many days for a check to clear or for a bank transfer to go through, despite digital innovations that we have already experienced with payments. This feels especially long when you compare how quickly a payment can be captured from a customer and the funds withdrawn from their account. This begs the question: why can’t a payment be deposited and settled into an account as quickly as having it captured?
Well, when it comes to this unnecessary inefficiency in regards to the U.S. payment system, change is edging closer. Late last year, The Fed announced that it would be constructing its own instant clearing and settlement rails via its new initiative FedNow. The instant payment scheme would be “designed to offer an option for consumers and business to transfer money instantly or nearly instantly in a ‘ubiquitous, safe and efficient’ manner from one bank account to another” and help replace the slow and frustrating Automatic Clearing House (ACH) system that we have come to know.
Additionally, this payment infrastructure would be universal, meaning that all banks would be included—even the those banks that reside on the smaller side.
While U.S. business owners won’t start feeling any impact of FedNow until 2024 at the earliest, to say that keeping an eye on the development with this schematic and prepping for the shifting payment model would be a good idea would be an understatement. As for smaller U.S businesses, having the insight of knowing faster settlements are on the horizon will prove exponentially beneficial for those operating on a paycheck-to-paycheck basis.
The next year—and the next decade, for that matter—of payment advancement is sure to be a pivotal time. While we look forward to the growth of payments via app interfaces, the mounting impact of digital wallets, and the promise of faster settlement times, WorkWave Payments is excited to keep a thumb on the pulse of the payments market, monitor where it is going, and continue to provide the insight and added integrated benefits to our customers in the very near future.
To learn more about WorkWave Payments, contact us and see how getting paid is made easy with our streamlined, secure, and PCI-Level 1 compliant integrated payment processing solution today!