4 Considerations That Payment Service Providers Need To Follow To Stay Competitive

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As the payments ecosystem shifts and evolves, payment service providers will face a challenging year. Here are four considerations that payment service providers must adhere to in order to remain competitive.
As we approach 2022, many people are wondering what the future holds for payments and FinTech innovations. As more online payment gateway service providers emerge, each is looking for new ways to differentiate themselves and meet consumers where convenience and security intersect.
Given the mobile trend, it is unclear how payment service providers will adapt and grow to meet the needs of consumers on this channel. One constant remains: speed and convenience are high priorities across the board. Furthermore, payment service providers will have to meet these demands while maintaining security.

1. Omnichannel
According to a new report, total digital wallet spending will exceed $10 trillion by 2025. This represents a nearly 83 percent increase in transaction value via digital wallets from 2020 to 2025.
It is worthwhile to investigate alternative mobile payment options as merchants, banks, FinTechs, ...
... and payment service providers evaluate priorities. According to the report, these options present a significant opportunity in terms of globally converged wallets. Other mobile trends include contactless mobile payments based on QR codes as well as NFC-based mobile payments. These mobile payment methods provide consumers with convenient options for both in-store and online (or in-app) purchases.

2. Speed & Convenience
Convenience and speed have been critical components of payments for both in-store and online channels. Consumers' desire for quick and easy payment methods will continue to influence the types of payment platforms, solutions, and services offered by payment service providers.
Swipe cards have been classified as legacy payment methods because they are one of the slowest modes of payment (and less secure). Add to that the growing number of alternative payment channels, and payment service providers are under attack at every level. Wearables and contactless payment methods are becoming increasingly popular as they allow people to bypass lines and avoid fumbling with wallets. Smartphones, smartwatches, and other smart devices are altering not only how people pay, but also how they bank and interact with brands.

It is critical to have easy access to payment applications. On-the-go customers expect real-time payments that are as simple as a wrist swipe.

3. Security
Security is more important than ever before. New payment methods expose consumers, banks, and FinTechs to new risks. To combat increasingly sophisticated fraudsters and hackers, payment service providers must keep a finger on the pulse of new payment security features and methodologies.
In 2022, biometrics will be a rising star, particularly in the field of identity documents. It also provides a promising method of authenticating and securing payments. According to recent reports, biometrics will be used to authenticate $3 trillion in mobile payment transactions by 2025.
As touch ID hardware becomes more common in smartphones and is increasingly used for tokenization and contactless payments, it presents a once-in-a-lifetime opportunity for frictionless and secure payments.
Not only do these new technologies improve payments security across the board, but they also boost consumer trust in emerging payment methods.

4. An Eye Toward the Future
Payment service providers who want to stay at the forefront of the wave of disruption in the payments space must look to the future. This entails adopting new technologies, best practices, and security protocols.
FinTechs, banks, the best online payment gateway service providers, and merchants must be aware of new consumer expectations as well as new security vulnerabilities as the Internet of Payments (IoP) gains traction. According to Statista, more than 75 billion Internet of Things (IoT) connected devices will be installed worldwide by 2025.

The convergence of IoT and IoP will result in an increase in non-cash transactions. Previously unrelated brands will begin to offer payment services, making nearly everyone a potential competitor. Garmin, a company known for its wide range of fitness watches and devices, is already offering payment services through their popular smartwatches.
Banks are also following suit. Others are looking into developing innovative banking solutions that use contactless, NFC payments technology in conjunction with popular devices.

Wrapping It Up
Payment service providers, as well as FinTechs, banks, and merchants, must adapt to changing consumer demands, the majority of which revolve around frictionless, secure payments. Adapting to alternative payment options while maintaining end-to-end security will become the norm. Those who can walk the fine line while providing a positive customer experience will be able to win more business in 2022 and beyond.