More choices at a lower cost? Digital Kiwi dollars? Breaking the dominance of the big credit card companies? There are some major changes coming for the way we pay says Will Miao, Head of Online Payments. He takes us through five big payments trends that will gather momentum in 2022.
1. Combining information will make transactions more seamless
Last year, Will outlined the payment trends for 2021, including the ability for us to choose to combine different types of information together so we don’t need to reach for multiple cards at a store or show our ID if we buy restricted products, such as alcohol online.
He says that trend hasn’t accelerated as fast as it might have, but it’s still steadily gaining traction. In particular, payments and identification are an obvious fit: “This seems like a natural outcome for the long-term so I think we’ll soon have a bridge between payments and a trusted ID.”
2. Mobile wallets will expand
During 2021, millions of New Zealanders started using Apple Wallet or Google Pay to display their vaccine pass. This has really given digital wallets a push – your vaccine pass is in your digital wallet next to your payment information in the same way that a physical vaccine pass would sit in your wallet next to your EFTPOS card.
“This can go even further,” says Will. “You can have your passport and your driver’s licence in there too, then it’s just one QR code scan to allow you to pay, identify yourself or show your vaccine pass.”
Worldline is currently working on a new partnership in the mobile wallet space, which will make use of QR codes in this way. In the pandemic, fingerprints and facial recognition are hindered by social distancing and mask wearing, so biometric use has been limited. However, the QR code user experience is a little clunky, and Will believes that biometrics will definitely be the method of choice in the future.
3. New law means merchant costs will reduce
Last year Will forecast lower merchant fees in future – and now there’s legislation being put in place to make that a certainty. Interchange fees in New Zealand are high by international standards; merchants here pay around twice what Australia pays and three times as much as Europe. But in October 2021, the Retail Payments Systems Bill was introduced, designed to make payments more competitive and efficient.
“This could cut the cost of accepting cards for merchants,” says Will. “We expect the Government to bring the interchange fees for credit cards in line with Australia’s.”
4. Open banking legislation will create competition
Another new piece of legislation is bringing open banking closer to widespread acceptance. A Consumer Data Right would allow consumers to share their information securely across providers, when it comes to payments and financial services, this is a framework for open banking.
“This will accelerate innovation in the payments space and provide real alternatives to the traditional plastic card,” Will says. “We’ve already seen a dramatic rise in Online EFTPOS during 2021, which uses Worldline’s Open API. It’s very cost-effective and smooth experience for consumers and merchants and it’s a great example of what open banking can do.”
5. A new Reserve Bank digital currency
More than 85 central banks around the world have been researching, developing or trialing digital versions of their national currencies, and the Reserve Bank of New Zealand is carefully considering its options. It looks likely that a digital Kiwi dollar could be introduced over the next few years, and this will give merchants and consumers even more payment options.
“This will be separate to commercial banking and the network could be managed by RBNZ or a contracted provider”, Will explains. “It should be incredibly efficient, digital payments could be faster, cheaper and safer in future. But it may mean the Reserve Bank has more visibility of people’s spending, and that could be a big leap for many.” Achieving the right balance between protecting our privacy whilst also ensuring security is key.
Thinking about payments, talk to Worldline
Worldline is committed to continuous learning and improvement. As a business we’re always reviewing changing consumer behaviours and advances in technology, to ensure the products & services we offer our customers, fit their needs. If you’d like to discuss what payment solutions would be right for your business, talk to the Worldline team today.