2016 in Review — Payments Take a Big Step Forward
Technology has taken some incredible leaps in the past year, including major innovations from SpaceX, the DNA App Store, and Amazon Go (no-checkout convenience store), to name a few. And in 2016, the payments industry moved forward with the best of them.
There has been more payments innovation in the past five years than the previous 20 years combined. Numerous platforms have emerged as a canvas for developers to paint their masterpieces, increasing the attractiveness and profitability of building new payments solutions. As consumer expectations continue to change, business owners, especially retailers and restaurateurs, are on the lookout for tools to help them succeed. Let’s look back at how payments evolved in 2016, and the resulting opportunities.
Establishing An Open Ecosystem
Since its introduction in 2008, the Apple App Store has proven to be a wildly successful business model. Apple has already paid developers more than $50 billion and surpassed the 130 billion app downloads. Many companies have since followed suit, creating their own marketplaces, greatly enhancing service offerings without needing to build everything in house. App markets are popping up in unexpected places. Helix, for example, built the first DNA App Store to help people better understand potential health risks and predispositions. In parallel, Clover App Market has reinvented the point of sale, greatly expanding the capabilities beyond what any one company can offer. We have seen rapid growth in the past year, surpassing 200 apps, and establishing a strong case for app markets to become the standard of any POS system.
The Modern Shopping Experience
The debut of Amazon Go has the potential to change how we shop and pay. With a decline in department store traffic; brick and mortar stores, which enjoyed modest sales growth of 1.6% compared to last year, face increasing competition from ecommerce, which saw a whopping 11% increase in sales. The mobile payments system used by Amazon’s convenience store represents a shift in how goods and services are sold, significantly increasing checkout speeds. Payments can now be made without wallets leaving a customer’s pocket, by using the same types of technologies in self-driving cars; computer vision, sensor fusion, and deep learning. In order for brick and mortar stores to stay competitive, they will need to adopt and implement new technology solutions to enhance the customer experience.
Virtually reality (VR) is finally starting to take off and was one of the most talked about trends amongst developers; it was only a matter of time until it made its way into retail. IKEA made headlines with the IKEA VR Experience, giving shoppers the unique ability to walk around a fully furnished kitchen from the comforts of home. The next logical addition is to create a payments solution to go with it. Imagine being able shop in a virtual store, interact with the items just as you would in a physical store, and then check out with no lines.
Similar to VR, artificial intelligence (AI) was center stage in 2016. As advancements in AI continue, payment integrations will follow suit. In fact, in a recent hackathon, we witnessed integration of Amazon’s Alexa for Clover to make online ordering even simpler. As the retail landscape continues to evolve along with consumer expectations, the opportunities for developers to change the way we pay will continue to grow with it.
The Next Frontier — Payments in Space
In October, Clover went where no payments had ever gone before! Clover teamed up with Nationwide to conduct a contactless payment from a weather balloon at 100,000 feet above the earth. Figuring out how to make payments happen in extreme conditions — at space-like altitudes and temperatures — offer insights into what’s possible, not only in space, but here on Earth as well. Commercial space travel may not be ready yet, but as we look into the future, it may become a reality sooner rather than later. SpaceX (and similar efforts) have fueled a new wave of passion in space exploration, introducing new, out of this world, opportunities; payments included. In the not so distant future, passengers may need to purchase last minute necessities as they ascend the atmosphere, similar to how airline passengers buy items onboard today. While we are still a ways away, we are looking forward to someday enabling payments in a galaxy far far away.
In 2016 we saw some major technological breakthroughs and in parallel, impressive advancements in payments technology, representing a wealth of new opportunities that will only continue to grow in 2017 and beyond. Building creative new payments solutions will be the crucial to follow the coming technology advancements. We are excited to see what 2017 holds for us!
