Payments Predictions 2016: Faster Payments, M&A, and a Blockchain Breakthrough

Copyright Canstockphotos/350jbPeter Drucker once famously stated “Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window.”  With this in mind, yet nonetheless undaunted, Carlisle & Gallagher Consulting Group decided to go for a proverbial drive down the payment’s forecasting road.  CG’s Emerging Payments Practice Leads Sam Maule and Jim McLeod recently discussed the payments space with ThinkDifferent Group’s founder David Brear.  They each picked a payment topic and shared their “safe bets” and “dark horse” predictions for 2016:

Mobile Wallets:

“My dark horse prediction for Mobile Wallets is that Apple will start to take significant steps away from app-based payments and toward the full integration of Apple Pay into iOS. The current non-contextual and siloed payment processes leave much to be desired from a customer experience perspective – for Apple Pay, as well as bank wallets, retailer wallets and beyond. A fully agnostic (within iOS) and highly contextual payment process would provide a much richer customer experience and offers Apple greater control over a seamless interface. For example, imagine if Apple Pay were integrated into the keyboard built into iOS. This could easily be called upon regardless of what app (Twitter, WhatsApp, Messenger, etc.) the user is in. Plus, it would massively expand Apple’s opportunity and protect the company from challengers that are bound to the social payments space in 2016.” -David Brear

U.S. Faster Payments:

“Early Warning’s capabilities – along with ClearXchange’s network – will allow the company to compete in the P2P space with Silicon Valley competitors, while it continues to lead the charge on faster payments.  While the Fed and its task force continue to make strides, ClearXchange may make us all forget about movements towards Same Day ACH.  Their network, along with some focus, could propel ClearXchange to the platform and company we all thought it had the potential to become when it launched in 2011.” -Jim McLeod

Market Investment and Acquisitions:

“They don’t call it a long shot for nothing, so I’m going for the ‘Hail Mary’ of predictions.  In 2016 either Amex or Discover will be acquired by a competitor or tech titan.  Potential buyers of Amex want its merchant and consumer base, brand recognition and internal talent.  Discover is an attractive acquisition target because of its long-standing relationship with China Union Pay.   I also predict that Google will partner with (or acquire) a leading payment provider to compete digitally with Amazon.” – Sam Maule

EMV and the U.S. Market Impact:

“While we rarely like to think about the “what ifs” in a negative light, it is hard not to think about how EMV adoption could adversely affect the landscape of brick and mortar retail.  There are many large retailers that are teetering on the verge of existence and many mid-size retailers struggling to keep their position, let alone gain ground. With the rollout of EMV and the resulting liability shift to the retailer, I fear a breach in 2016 at one of the above-mentioned retailers that did not properly adopt EMV will force a shutdown of multiple locations – or even worse, a complete shutdown.” – Jim McLeod

Bitcoin and Blockchain:

My dark horse prediction for blockchain is that while 2015 was the year of experimenting with the blockchain, 2016 will be the year of doing! Banks will start taking their blockchain experiments out for a spin in 2016. While it is very unlikely we’ll see a customer-facing product built on the blockchain, banks have been experimenting with a number of internal use cases for blockchain technology. My big bet on this one is that something magical happens in the Trade Finance space first – probably with a central body running the guts of it. There are a number of promising startups in Europe and beyond that have very sensible answers to these problems. With a central body orchestrating, it could strip hundreds of millions in operating waste from the companies that get on board.” – David Brear

The full commentary on 2016 Payment Predictions – including all the contributors “safe bets” and “dark horses” – can be found here. We’d love to hear your thoughts and, yes, you can let us know if you think we are bonkers.

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