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10 Predictions for E-Payments

Explore the predictions for the e-payments landscape in 2023, including the revival of wallets by Apple Pay, the indecisiveness of Square's independence, and the steadfast integration of PayPal with eBay. Learn about the evolving fee structures and pressures on interchange rates, the ongoing risk of breaches, and the slow adoption of EMV technology among merchants. Discover how real-time payments may emerge amidst changing landscape dynamics, as well as the bifurcation of NFC technology propelled by mobile payment solutions.

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10 Predictions for E-Payments

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  1. 10 Predictions for E-Payments John Stewart Digital Transactions

  2. 1. Apple Pay Will Revive Wallets • 11 issuers already on board • McDonald’s, Disney, Walgreen, others accepting • 800 million iTunes accounts with payment credentials • No discernible fee to merchants • Based on 2-year-old Passbook

  3. 2. Square Will Not Remain Independent • $6 billion valuation • Sell while the iron is hot • Company needs bigger merchants and a consumer strategy

  4. 3. eBay Will Not Spin off PayPal • Recent news reports revive prospect of spinoff • Won’t happen—at least not any time soon • Data synergies too strong, benefits eBay marketplace • Braintree/Venmo technology (eg, one-click) important to eBay

  5. 4. Transactions Will Always Carry a Price… • …And merchants won’t like it • Possibility of new token fees; issuers already getting hit • Interchange structure may change but won’t go away

  6. 5. …But Interchange Will Come Under Greater Pressure • Token fees won’t bring in what the networks had hoped • But they will fuel merchant attacks on interchange as a result of… • …lower fraud and… • …resentment over yet another fee (assuming they hit merchants)

  7. 6. New Fees Will Add up • FANF network fees at Visa—recently tweaked for aggregators • Apple’s 0.15% tokenization fee—on top of token-service fees from Visa and MasterCard • Right now, tokenization fees hit issuers. Could hit acquirers/merchants down the road

  8. 7. Breaches Will Continue Indefinitely • Cybercriminals have figured out the system’s weaknesses—new malware variants emerge constantly • Incentives are strong with stolen credentials fetching good prices • Even with EMV, fraud will shift to e-commerce

  9. 8. EMV Will Take A Long Time… • Level Four merchants won’t adopt any time soon • Costs of equipment, staff training • Liability shift not necessarily a spur to adopt • Some merchants argue cost of fraud cheaper than adopting • The wild card is Apple Pay—driving NFC deployment will also drive EMV deployment

  10. 9. …But Real-Time Payments Won’t • NACHA trying again for same-day ACH, but this time with multiple settlement windows • Fed lining up in favor • New processors like Dwolla agitating for real time settlement • Next step will be real-time

  11. 10. Host Card Emulation Will Bifurcate NFC • A tale of two NFCs—secure element and HCE • Apple Pay’s emergence on a secure element means divide between iOS and Android, with Android being largely HCE • HCE less secure but more appealing to issuers

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