Experts from the cards and payments sector discuss with Douglas Blakey and Evie Rusman the prospects and key priorities for the sector in 2021

Payments predictions in 2021: 3 trends that will impact how we pay

Even without the pandemic, 2020 was slated to be a big year for payments. And despite, or rather because of Covid-19, the innovations made in payments this year have been huge. Major changes in consumer behaviour have led to significant increases in digital payment volumes. With two thirds of UK adults reporting they have made more card payments since the start of lockdown in March than they did before the pandemic.

With these trends set to continue into next year, it’s time to look ahead to what else could be in store across the payments landscape.

Mobile payments will start to overtake physical card transactions

The ongoing debate currently happening within the European Payments Initiative (EPI) camp is mobile payments vs cards. And the events of 2020 will undoubtedly have an impact on the ultimate winner.

Consumers increasingly moved from contactless to contact-free during the pandemic. Opting to shop online from the comfort of their home wherever possible during the first, strictest lockdown, and eschewing cash in favour of mobile-based payments when eventually allowed out and about.

Given this seismic change in consumer behaviour, it is likely we will see mobile payments be crowned the winner of the EPI’s debate in 2021. With the use of digital wallets set to grow exponentially in the coming months. As even with the hope of a vaccine on the horizon, consumers are now used to buying more online and will be reluctant to give up the ease and benefits that come with contact-free purchasing.

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2021 forecasts ACI Worldwide: Request to Pay will launch outside the UK

Direct debits, while often seen as good for consumers, can be a headache for billers and corporates. Pre-pandemic, one in three SMEs reported cash flow issues due to late payments and 10% of late payments were written off entirely. In contrast, with consumers needing increased control over their finances more than ever before, having an automated “withdrawal” of funds from the account is also increasingly being avoided in favour of control.

Request to Pay (R2P), which has launched in the UK and started to launch across Europe this year, will solve these issues. For billers to take advantage of R2P, they need to use a bank that offers the service. But for banks to put resource and investment into offering the service, they need to see enough demand and value opportunity to warrant updating their mobile apps.

While it might not happen in the first half of 2021, we will see some movement in the chicken & egg game when it comes to launching R2P across the fuller European landscape. And we will see just how open banking fits in, as well as the EPI capabilities set to emerge in 2021.

2021 forecasts ACI Worldwide: QR codes will come to Europe

While QR codes are a common sight in China and the far east, pre-pandemic they had failed to catch on in Western Europe as a popular payment method. But following the hospitality industry’s attempts to get patrons back into bars and restaurants while adhering to track and trace measures, QR codes have become a common sight for everyday consumers. This new-found comfort with QR codes will see them come to market across Europe in a meaningful way in 2021 and beyond.

Dean Wallace is Director of Real-time Payments Product Management at ACI Worldwide