The Top Payment Trends Shaping Strategic Thinking in 2016, Part 1

McKinsey&Company’s 16 in 2016: Trailblazing Trends in Global Payments presents what’s going to be top-of-mind for corporate payments executives in the year ahead. Let’s take a look at their first 8 predictions, along with links to related content in Corporate Payments Insights:

1. As shopping moves in-app, digital payments displace cash. While cash has named king for offering convenience, control, and value, digital payments will ultimately offer enhanced convenience (thanks to automation, personalization, and lack of geographic boundaries), more control (via spend management tools) and extra value (data available to merchants used to serve special offers) to consumers.

Learn more: Mobile Payment Adoption: A Global Snapshot and What Does the Mobile Payments Market Look Like in 2019?

2. Multichannel solutions win as channels converge. Since people increasingly shop across channels, retailers and their data analytics partners—as well as digital wallet providers—will work to provide consistent, value-added experiences throughout their shopping journeys.

Learn more: Bricks and Mortar, Meet Bricks and Mobile

3. Migration to EMV ignites mobile payments. As more merchants implement the technology required to handle today’s emerging digital payment technology, opportunities for innovation and expanded consumer adoption of new forms of payment are likely to characterize the marketplace.

Learn more: U.S. Retailers One Month Away from EMV Liability Shift

4. Nonbanks will continue to lead in peer-to-peer. Digital innovators like PayPal and Venmo surpass banks in their ability to provide P2P solutions, demonstrating value for users with cross-sell opportunities, marketing insights, high margins for certain vendors, and attractive cross-border currency exchange margins.

Learn more: Social Media and P2P Payments: A Brief Overview

5. Bigger, smarter data requires bigger, smarter capabilities. The growth of big data will continue across channels and along the value chain—but it signals a need for companies to invest in the technology required to make the most of it and benefit from dynamic business steering, insights- and behavior-driven marketing, and data-rich consumer and enterprise applications.

Learn more: Unlock a Treasure Trove of Insights in AP Data and Establishing Value: Account Payables’ Tech Priorities for 2016

6. Loyalty enters a new age. Payments service providers will be relied on to help partners maximize their customer loyalty programs through payment service/loyalty program integration and management.

Learn more: Customer Loyalty Programs Sweeten the Mobile Payment Value Proposition

7. New regulations prompt new service offerings. Third-party processors will be poised to compete with traditional depository institutions for consumer transactions and data, spurring the leading depository institutions to improve and expand their services, particularly in the digital realm.

8. Cloud-based point-of-sale services enable further specialization. Merchants using cloud-based POS applications will have access to additional service offerings designed to meet their vertical- and industry-specific needs. The technology relies very little on hardware and allows for easy integration, thanks to flexible APIs.

Learn more: AP Automation: The Pros and Cons of the Cloud

Stay tuned for the upcoming post reviewing more of McKinsey&Company’s predictions for 2016. We’ll round-out the list with a second set of 8 trailblazing trends.