European retailers gear up to embrace new payment technologies
In a recent survey, nearly three quarters (71%) of European retailers and financial institutions said that they're planning to invest in payment technology over the next two years. The European Parliament's recent decision to adopt the revised Directive on Payment Services (PSD2) – a proposal promoting competition and innovation within the payment services sector – should make this easier. But why is payment technology such a big deal?
Why payment technology is worth investing in
Immediate payments are beneficial to businesses and customers; for example, they make it easier for small businesses to compete. In the past, small businesses had to prioritise paper payment over plastic because of fees. Now – with new cheap ways to transfer money – it's easier for small businesses to accept card, contactless, online and mobile money transfers without incurring added costs. An innovative company working in this sphere is PayPal, which offers companies card readers for a low upfront cost – there is no monthly fee. Small business owners can use these to provide contactless or chip and PIN payment options to customers.
Concerns within the industry
One of the biggest concerns for businesses and other users of payment technology is security. There are always risks inherent in making remote transactions and cybercriminals have been known to target users. On the bright side, security is constantly advancing: 70% of banks are increasing their investment in payment security this year. Some, like HSBC, are experimenting with using biometric data as an added safeguard, while others such as Santander are looking into blockchain technology.
A cashless future?
If more businesses invest in payment technology, we may be looking at a cashless future. Some countries have almost made the transition to cashless; for example, the Swedes use plastic for most things, including small purchases like newspapers. Moving away from paper tender would also be a boon for the war on cash – one of the war’s aims is to remove large denomination notes from circulation, thereby limiting black and grey market activities. Having no notes at all would be similarly restrictive.
Innovative payment services
The European Parliament's adoption of PSD2 should inspire some interesting developments over the next few years, but in the meantime there's plenty of innovative and exciting tech out there. For example, check out Selfie Pay, which uses facial recognition software to approve transactions. Then, of course, there are international money transfer websites such The Money Cloud, where you can trade currencies without worrying about security or prohibitive fees.
If your business is considering investment in payment tech, do keep reading our blog to stay informed about the latest industry developments.