It’s that time of year again. We welcome a new year, turn a fresh page on the calendar and publish a set of predictions for the year ahead. Our annual January tradition is to anticipate what’s in store for cross-border payments. This year in particular is jam-packed with promise and the excitement of a fresh start to a new decade.
If you’re hopeful about the promise of real-time payments and ready to streamline your payments operations while making your payments more recipient-friendly than ever, you’re not alone. As a new decade dawns against the backdrop of the continued globalization of business, the future of frictionless payments is brighter than ever. Read on for four predictions about what the year 2020 will bring.
Prediction #1: We’ll all finally realize that a great payments experience isn’t limited to the payments acceptance side of the equation.
For most businesses, the acceptance, or “accounts receivable” side of the payments equation, has already been prioritized and fully developed. That’s only natural, because you want your customers to be able to pay, and it’s in your best interest to provide a range of options that makes it easy. That’s why, on the acceptance side, there has been a long journey to maturity, with much investment resulting in a well-established array of options. But in 2020, thanks to the advancements in payment offerings and increased awareness that a positive payment experience creates positive associations with your company, we expect to see more companies adding payment options to the “accounts payable” aspect of payments, with the goal of paying recipients quickly, efficiently and in the recipient’s own currency.
Prediction #2: Globalization of business will keep global payments revenues strong and steady.
A September 2019 report by McKinsey & Company found that after 2017’s unprecedented, double-digit growth in global payments revenue, there was a return to the established pattern of steady yet strong performance. Global payments revenue reached $1.9 trillion in 2018, reflecting six percent growth, according to McKinsey, and we foresee similar strong and steady growth to continue as we enter 2020.
Prediction #3: The platform economy will continue to thrive, along with demand for the efficient cross-border payments that are necessary to its growth.
According to a 2019 McKinsey & Company report, about 20 to 30 percent of the working-age population in the European Union and United States is engaged in independent work. “While only about 15 percent of independent work is conducted on digital platforms now, that proportion is growing rapidly as people use these platforms to learn, find work, showcase their talent, and build personal networks,” the report states. As platform usage grows, we foresee that their need to send cross-border payments will grow apace.
Prediction #4: The year 2020 will see platforms and networks using payments as a way to drive engagement and reach new audiences.
New audiences aren’t limited to customers! They include new freelancers, publishers and sellers too. “Sellers will flock to platforms that simplify the process of selling,” according to a 2018 Forrester Consulting research report. “Sellers use platforms to make the online process simple and seamless for both their customers and themselves. Platform companies that are service-minded – offering services that help sellers sell more and ease the transaction process – operate at a competitive advantage.” We believe that in 2020, platforms are going to take real action in making the online experience a seamless one, and a huge part of that experience will be frictionless payments. The more you make your payments relevant to the real human needs of your recipients, such as the need to receive payments directly into their bank account -- the more people will be drawn to your platform. We believe that in 2020, companies will realize that if they set their recipients up for success, they will be rewarded with loyalty.
Will you lead the way to a more frictionless payments experience for your recipients in 2020? Get ready for a new year by contacting one of our Local Bank Transfer specialists.