Consumer payments have seen their fair share of innovation over the past few years. From Paypal's (and now Stripe's) push into retail payments and WeChat's maturation into a financial services platform, we're seeing the future of payments play out in front of us. It's clear we've moved from a payments world consisting of stand-alone devices to an interconnected one. We've evolved from ATMs and payment terminals to a world where payments are almost invisible (think Uber), made possible by intelligent integration into consumer software. But what's next? Where is the next round of payments innovation going to take us?
The third wave of paymentsForrester believes we're moving into autonomous payments. In the research firm's new research paper, the first wave of payments consisted of disconnected machines, like payment swipe terminals and ATMs. You could primarily access money and move it around. From there, we moved into a payments world where our software and digital experiences integrated payments -- the second wave. The third wave, and yet to come, is autonomous payments. Here, payments become an invisible part of a high-value commerce experience, defined by three key components:
- Authentication becomes the payment: Forget chip and pin or other current authentication methods. We're talking biometric identification, from fingerprint to facial ID to computer vision that recognizes you when you walk into a store or step in front of a vending machine.
- Transactions become invisible: We already have a taste for invisible payments. When you exit an Uber, you don't even need to think about payments. Everything is handled behind the scenes in the app. Payments will continue to become an integrated part of software, invisible in the user experience.
- Rewards become orchestrated: Most loyalty programs todays are just ways to push more product through the same pipes. And forget about finding ways to consolidate multiple rewards and reward programs for consumers. It's a mess. In the autonomous payments wave, Forrester expects distributer ledger technology to climb the walled loyalty gardens and create new opportunities for consumers and the merchants they shop at.