10 Key Trends in Electronic Payments For Nigeria
2020 will be a new year for electronic payments. Already payments trends from the end of 2019 point to several key developments. Black Friday, for example, was once the busiest retail day of the year for most stores. For many retailers this year, though, the foot traffic was disappointing. People are paying for things in less predictable periods and increasingly doing it online. The real winners this year are going to be the stores with strong payments providers that let consumers pay how they want.
According to tech crunch, it was recorded that shoppers spent a record $7.4 billion online up $1.2 billion from 2018 – 2019. However, Much of this year’s traffic came from smartphones. As we look ahead to electronic payments trends for 2020 in Nigeria, one takeaway is certain. Payments providers should take notice. To be successful in retail, seamless payments integrations are necessary to stay competitive and capture a more fragmented consumer base.
This article, shows the 10 key trends for electronic payments in Nigeria from 2020 onwards; these are trends that will drive the future of electronic payments.
1 . Biometric Identification
With the rise of applications such as Google Pay and Apple Pay, better security measures are emerging to address new challenges. Biometric authentication will continue to develop in 2020.
Many digital businesses have already started to upgrade their applications to integrate biometric authentication as a payment mode. This technology has evolved from a simple fingerprint to more complex facial recognition and iris scanning. Unlike conventional payment modes, biometric authentication aims to increase security, accuracy, and efficiency significantly.
Firms looking to implement biometric identification should aim for frictionless systems and focus on usability. Additionally, handling biometric user data poses new challenges on payments applications.
2 . Heightened Security
As banking and finance face ever more sophisticated fraud, they’re constantly trying to stay ahead with systems that are smart enough to outwit the criminals. Many have to balance this while still being easy to use and relevant to the consumer. Security is the key factor in determining the feasibility of any payment method.
It was revealed that the banking sector lost around $31.3 billion in 2018 in america due to card losses, i wonder how much we lost and are losing here in Nigeria. This calls for more secure and innovative online payment modes that make it more difficult for fraudsters to steal. The integration of biometric security features for authenticating consumer payment will be a priority for payments applications in 2020.
3 . Recurring Payments
Internet of things (IoT) technology is rising to change the electronic payments landscape as it has proven to create unified payment processes. Just like drivers with RFID sensors can bypass toll booths and pay with a card on file, buyers, like those at Amazon Go stores, will choose their purchases, leave the store and get a receipt via text or email or via an app.
4 . Code Replacing Cards
Previously, a user’s bank account was recognized through a set of unique digits mentioned on the card. However, after the arrival of EMV technology, more computerized and safer techniques are now in place. With EMV technology, the bank accounts receive codes that change with each transaction to achieve more security. The codes are going to replace plastic cards in the future since consumers want more secure payment systems.
5 . Payment Testing Via AI
Artificial intelligence will keep playing a bigger role in payment-driven decision making, specifically by facilitating payments organizations to examine customer experiences and rank payment testing scenarios. Payment processors and progressive networks have opportunities to present AI into the testing process to help deliver more precise, efficient testing and more efficient monitoring to control fraud.
6 . Integration Of Digital Identity
The advance digital identity solutions are going to rise across industries as these solutions help mitigate cyber risks, especially related to electronic payments. Increasing digitalization is leading to an increasing number of cyber-attacks. Online identification, customer authorization, and authentication are critically important for ensuring online payment modes’ safety in the digital environment.
7 . Mobile Revolution
Today in 2020, more than half of the global population owns a smartphone. More than a third use their cell phone within five minutes of waking up in the morning. Internationally, mobile devices rule the total time spent online.
The increase in smartphone usage means that now 11% of online buyers use their phones to buy online. Expectancy follows demand and so the public demands different payment options. They expect to see quicker, easier and clearer ways to make their electronic payments at ease. One of the value-added services predicted by experts is a single view of account information. This is imaginable with a mobile banking app enabling the consumers to check all checking and credit card balances at a time.
The danger here for banks is that aggregators would begin to cut out the banks in mobile payments by offering this increasingly sought after united view of consumers’ finances. Banks are fundamentally two APIs away from losing a large chunk of their mobile app traffic.
Therefore, it implies that being unaware of the changes and trends in mobile payments is a certain way to get left behind. Internationally, the total number of mobile payments is expected to reach more than 1 billion by 2020 and 2023 would see more than $2.73 trillion.
8 . Contact-less Electronic Payments
Banks had started to issue contact-less payment cards earlier this year. These cards, embedded with a novel technology called near-field communication (NFC), let consumers just wave or swap their cards near any card reader to make their purchases up to a pre-specified amount. As merchants are updating their payment hardware to keep pace with this trend, the contact-less payment mode is expected to go beyond the contact-less cards. The same technology would enable merchants to accept mobile wallets such as Apple Pay, Samsung Pay, Google Pay or payment via fobs, watches, or wearables.
9 . Wearables
Other exclusive payment channels like wearables are poised to change the payments landscape. With the enormous widespread adoption of smartphones, payment applications, and mobile banking, wearables provide easy access to these applications, anywhere at any time. Real-time ease is key. Consumers can use contact-less payments for normal purchases, particularly for low-value transactions, quickly and safely. Alternative payment methods help to uplift banks’ customer experience via faster, seamless and integrated transactions.
10 . Millennials and B-z Reshape Payments
Millennials and B-Z now make up nearly half of the Nigerian population. Born between 1991 and 2016, these generations are more tech-savvy than Generation X.
B-Z especially can’t remember a time before social media or online shopping. Often panned as impatient and ambitious, these digital natives are driving consumer shifts to mobile shopping and omni-channel retail. Most demand efficiency and immediacy in the services they use.
Seamless user experience and payment integrations with mobile banks are essential to capture these consumers. Even a slightly irritating checkout experience can lead to cart abandonment. Failure to keep up with the times could be fatal to any retailer.
Electronic Payments specializes in providing customizable, EMV-ready payment and point of sale solutions to grow and empower businesses nationwide. The most interesting part about this trend is that, the future holds incredible opportunities for online payment service providers and companies as well as for new entrants in Nigeria today. Still, Keeping pace with these trends will be a challenge; however, meeting the increasing customers’ expectations for their electronic payment journey is the only option businesses have to succeed.