Where Does the Payment Technology Road Lead?

The last two years have shown us it’s impossible to predict exactly how, when and where the payments landscape will move. We can make educated guesses, by analysing emerging technologies, consumer behaviour and payment patterns, but the world will throw its own challenges in the way, altering the path we see ahead, or accelerating it beyond our control.The pandemic has made us re-evaluate how we manage payments, so what have we learnt over the last two years in hospitality payment technology?The road is never straight - QR comebackThe technology road is not a straight one. One excellent illustration of this is the comeback of QR codes. During their general introduction in 2010, QR codes were seemingly forced upon us as an impractical ‘tool’ that had no distinctly useful purpose, other than for making marketing or advertising seem ‘techy’. They quite rapidly faded out of the mainstream. Then, as social distancing became an established part of society, businesses had to rethink the transfer of information, and QR codes found their place in the technology landscape. Their re-emergence demonstrated the important role they could play in simplifying the payment process, with ‘scan-to-pay’ QR codes located in many hospitality locations. They have also proved useful in other ways, not just as a method to facilitate easy payment transfer, but also as a link to menus and for web-based ordering. Some things will get left behind - cashThe rate at which the payment landscape has shifted to cashless has been irreversibly accelerated by the pandemic. Cash as a percentage of all payments fell from 56% in 2010, to 45% in 2015, and then with a steep decline to 17% in 2020.[1]We have reached a tipping point where there is no going back, but to move forward we need to ensure we are working with the right payment methods that benefit businesses and consumers. The fastest route is fantastic…but we need to be cautious - contactless and direct transfersIn October 2021 there were 1.3 billion contactless card transactions, which is 34.1% more than October 2020, and 74.5% more than October 2019.[2] Our appetite for speedy, seamless transactions is not reducing. However, as the contactless card limit in the UK rose to £100, there are some reservations from consumers as to whether this will enable overspending, and from retailers with regards to higher cost ‘walk-offs’ - customers leaving the store without realising their payment hasn’t gone through.    Mobile banking, PIN on Glass/PIN transactions and direct transfers (bank to bank), are all emerging technologies that will reduce costs and facilitate fast payments. Yet, hospitality providers should be aware that it’s likely we will see card schemes and banks begin introducing some other charges for these in order to recoup their profits lost from the reduction in sales of card terminals.It can be hard to know which way to go - biometric payments and cryptocurrencyBiometric payment will almost certainly revolutionise the payment landscape. However, we can’t yet know in which form biometrics will be most widely and effectively implemented in the hospitality landscape. Iris, fingerprint, facial, movement, and voice are all big news in biometric payment technology. ‘Pay by selfie' or 'smile to pay' services have been around for a while, especially in China, but haven’t become widespread in the UK or Europe, so we have yet to see which of these methods will pull ahead.​Before Covid-19 hit, it seemed as though fingerprints might emerge as the foremost biometric payment method, but the emphasis on reducing touchpoints to cut back on the spread of virus has meant facial and iris are becoming more prevalent. Although it’s possible Amazons’ palm/vein recent launch may be the way forward.​Another uncertainty is whether cryptocurrencies come into play as a method of payment in our day to day lives? Could we be paying for our morning coffee in crypto in the next few years…unlikely, but it’s hard to say never.Keep moving forward, but there is much to be learnt from the path you’ve travelledTo understand the future, we need to look at the past. When it comes to technology, we have to understand how and why changes have happened, by looking at consumer behaviour, reservations and the factors which have influenced their decision to embrace certain technologies. Generational adoption, especially in technology, is a continuous iterative process. PoS as an independent process doesn’t really exist anymore, instead we have different solutions coming together seamlessly to take customers on a streamlined, personalised journey. Technology has facilitated us interacting with customers, collecting data and taking payments in the easiest way possible. Utilising personal data for a better consumer experience, whilst creating a hospitality journey with frictionless processes and transactions, is certainly the future of payments, but the focus should be on security and ensuring data is used responsibly.​​

1. https://www.ukfinance.org.uk/sites/default/files/uploads/SUMMARY-UK-Payment-Markets-2021-FINAL.pdf
2. https://www.ukfinance.org.uk/data-and-research/data/cards/card-spending