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'Invisible payments' will have more than a token appearance.

Summary: They will fuel the next wave of digital transactions

Convenience has long been the driver of payments innovation. As customers crave greater ease in the ways they pay, the industry has responded with fast, easy, secure and seamless payment options.

These factors have combined to usher in "invisible payments", which take traditional methods such as cash, debit and credit cards and card readers out of the equation. In their place customers are able to use digital wallets for purchases.

Invisible payments are fast becoming the preferred way to pay for many consumers because they are quick and take place behind the scenes. Anyone who has taken a ride with Careem or ordered a takeaway from Deliveroo has experienced an invisible payment.

Image Credit: Ador Bustamante/[c]Gulf News

The friction that customers have long encountered when paying -- whether waiting in line at stores, fumbling for the right cards or manually entering payment information on point-of-sale (POS) machines -- is now reduced with invisible payments.

Smartphones have changed consumer expectations in how they experience the world around them through literally putting the world at people's fingertips. These devices have also changed the way we shop and pay for things.

They have accelerated the adoption of invisible payments by increasing access to online and mobile commerce. According to our latest Ipsos research, mobile spend in the UAE is forecast to grow 26 per cent between 2018 and 2019 to around Dh20 billion, with momentum expected to continue into 2020 with a further 25 per cent growth.

Invisible payments in action

Customers don't want too many steps in the payment process. They want simplicity, speed and security and they want it in the palms of their hands.

People don't engage in a transaction for the joy of the payment experience. They pay to experience the joy and the value in the things that they covet, want and need. Innovation that improves customer payment experiences and overcomes friction while also increasing security will be critical for payments, now and in the future.

Reducing friction to create invisible payments is a top priority for payment innovation. For example, PayPal's One Touch feature helps remove barriers to online shopping by allowing users to remain logged in for easier and faster checkouts while keeping their full financial information secure. Detailed usage tracking and user device habits are captured to enable companies to successfully identify customers by matching their patterns.

Reducing friction to create invisible payments is a top priority for payment innovation. Examples of invisible payments have already been incorporated into commonly used services and products.

Contextual commerce applications like Pinterest and Instagram have "buy now" buttons and voice-assistants like Amazon's Alexa are payments that are removing friction from the payment process. They enable users to purchase things they want within the platforms they're on, with no interruption to their experiences.

In the automotive space, internet-enabled connected cars are starting to communicate with gas pumps to pay for fuel. Mobile apps have revolutionised the way people pay for parking. With the RTA's mParking service, for instance, residents don't have to dash to the meters in the sweltering heat of summer to pay for or extend their parking: they can now do it remotely from their phones.

What's next for the payments industry?

The future of payments will be largely influenced by the following technologies:

* Artificial intelligence (AI) -- AI and machine learning are being explored in the fintech industry to deliver richer, data-driven insights that allow businesses to focus on delivering highly personalised purchase experiences;

* Virtual Reality (VR) -- Payment platforms are already being used inside virtual reality environments. Companies are exploring how VR technology can seamlessly let us explore and shop but also pay through VR technology with simple gestures;

* Blockchain -- This technology will go beyond financial services by creating opportunities for data on the sources, identities, credentials and digital rights to be securely stored with distributed ledgers in many different industries from aerospace to retail;

* Biometrics -- Biometric identifiers like voice recognition, fingerprint scanners and facial identification are rapidly being adopted into payment technologies.

For now, invisible payments are enabling transactions to take place in the background as payment providers and merchants prioritise experience and find more ways to reduce barriers to purchase. The payments industry will continue to be disrupted by consumer demand for ease and convenience.

Technological advancements will provide the tools the industry needs to respond to these demands. It will allow for the creation of innovative solutions that meet and exceed consumer expectations, ultimately leading the industry to the next-generation of payment innovation.

Efi Dahan is General Manager, Eastern Europe, Middle East and Africa at PayPal.

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Publication:Gulf News (United Arab Emirates)
Date:Jan 31, 2019
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