The Age of the Invisible Payment

From architectural floor plans to open APIs, design today is all about transparency, flexibility, and visibility. When it comes to payments, make that invisibility. Using the terms “openness” and “invisibility” to describe payments innovation—and really, the future of payments—has significance. It drives home the point that the traditionally “closed” financial services industry is becoming more consumer-centric. It’s stretching beyond its comfort zone and entering an unprecedented age of growth and change.

Unpacking the Concept of Openness

As explained in The Basics of Open Payment Technology, an open ecosystem supports the sharing of resources and widens the field of development; on the other hand, resources within a closed platform are proprietary and more tightly controlled. An open business model—and certainly, the use of open technologies—drives a faster and more dynamic transformation because everything from the development of a new piece of code to a process-changing “bug fix” are shared among industry stakeholders. There’s an element of collaboration, a collective movement toward improvement, and a “we’re in this together” attitude that fuels the flames of innovation and progress.

Today’s market trends, which include the widespread adoption of mobile devices and the emergence of non-financial brands jumping on opportunities in the payments space, are opening up the industry. Consumers’ demands are rapidly changing and companies require a new level of business agility to keep up. In fact, most industry analysts say that organizations who fail to embrace the “new way” of openness will be left behind. They’ll lack the insights and capabilities required to achieve a competitive speed to market. We’re seeing that the practices and policies of established major players are beginning to mirror those of forward-thinking tech companies, whose success has come on the heels of openness.

The “Holy Grail” of Payments

The industry’s more open development environment enables an ultra-responsive improvement of the payments experience for consumers—and it’s barreling toward the creation of the invisible payment. And that means a payment that’s just plain quicker and easier, because swiping a credit card or tapping a smartphone at the point of sale isn’t fast or easy enough.

As i2c, Inc. explores in their white paper, The Next Evolution in Commerce: Invisible Payments, mobile hasn’t gotten it quite right—yet. Here’s what they uncovered what people want from their payment experience:

• Acceptance – I want to be sure that my method of payment will always be accepted.
• Simplicity – Payments should be convenient, frictionless and not overly complex.
• Security – I want to protect my personal information so I need my payments to be secure.
• Speed – The process for making a payment shouldn’t hold me up.
• Predictability – Payments should work the same everywhere I go, including online.
• Control – I want to be able to choose how I pay and determine what communications, if any, I receive in connection with each payment.

i2c explains that “an invisible payment would address many of the needs consumers identify as critical for them to adopt mobile payments. It would make acceptance more wide spread and the experience predictable, while adding noticeable speed and simplicity.” Ingenico ePayments’ The Internet of Things: Rise of the Machine Shopper puts it another way. They say an invisible payment process should “ultimately take the customer’s mind away from the payment specifically and focus them on the overall convenience and user experience.”

Read more in Insurance Payments and the IoT.

An invisible payment is the evolution of today’s mobile payment. And we’re getting there: The Smart Insights report Invisible Payments Key to Omni-Channel Commerce predicts that invisible payments will account for 23% of all electronic transactions by 2021. But the question becomes, how will we get there? In an upcoming post, we’ll explore the things that payment industry organizations need to do to make invisible payments a reality.