What will 2012 Bring for Card Payments?
The Card Payments industry is at a crossroads. However, depending on which path the industry follows it may soon be facing a precipice.
The technology collaborations that smartphones, social media and NFC allow are, without doubt, potential gamechangers. The likes of Visa and Mastercard know this and, depending on your point of view, they continue and will continue to back many horses or muddy the waters.
Of course, nothing is inevitable as there are large hurdles to be overcome in growing new payment networks which bypass established card schemes. Credibility, security of funds and exception processing are but some examples but, in time, alternative models and processes can and will be developed to overcome them.
2012 will see further progress and additional approaches to harnessing these game-changing technologies but it will be another year of jostling for position as some clarity emerges on the way forward.
Strategically it will be an important year in the background but, on the ground, the future is a little easier to see. We'll come back to some of these in the coming weeks but, for now and in no particular order of significance, here are some headlines:
1. EMV will gain sufficient traction in the USA to force the hand of those who doubt its value.
2. Contactless payment infrastructure in the UK will advance considerably, although take up in terms of number of transactions will remain behind target. The London Olympics will be seen to be a missed opportunity in promoting the concept.
3. At least one, but probably two, PED vendors from Asia will make a significant impact in the Western Europe market.
4. Verifone and Ingenico will continue to increase their capabilities but in so doing will concede vital high value market niches to more innovative and consumer focussed vendors. They won't care as their businesses will continue to grow in the mainstream sectors in the short term.
5. Despite the growth of Verifone and Ingenico, independent PSPs will continue to prosper as the new devices entering the market (implied by 3 and 4 above) will require to be serviced.
None of the above is earth-shattering but the shoots which emerge from these seeds will be small enough and reactive enough to take advantage of the post-2012 landscape in terms of supporting social media, smartphone and NFC based solutions.
Should the mainstream payments sector become dominated by two schemes (Visa and Mastercard) and two service providers (Verifone and Ingenico) then industry growth will depend upon emerging solutions from everyone else. 2012 may therefore turn out to be the year in which the fate of card payment as we know it today was sealed in a competitive inevitability.