The financial industry must consolidate omnichannel payments, card payments and direct-from-bank Open Banking payments into new ‘Open Payments’ platforms to meet the demands of connected customers and retailers.

This is according to research from payments processor RS2, which examined the trends and technologies that are driving innovation in the commerce space. It found that:

• Mobile, contactless, and digital payments are fulfilling their promise of revolutionising retailing, hastening the decline of cash
• Omnichannel sales will account for more than half of total European retail sales by the end of the decade
• Regulation is a major driver of change, both directly, such as demands for new security standards, and indirectly, such as new FinTech providers changing consumer expectations of financial service providers
• Open Banking, and similar schemes, require the payments industry to enable card-less, and usually in-app, bank account-initiated payments for all checkout types, both physical and digital

The study found that these changes are forcing retailers to be more receptive to new payment types to meet consumer demands and keep up with competitors.

RS3 believes that payment providers must invest more in consolidating their payment platforms to enable interaction with any payment ecosystem. The new ‘Open Payments’ platforms should also include services such as device management, customer insight, security and compliance, according to the report.

“Whether it’s in-app, contactless, or via a chatbot in Facebook, consumers are eagerly adopting a wide range of ways to pay. In parallel, the advent of Open Banking has accelerated the card-less ecosystem and merchants are keen to harness the capabilities it offers. As payment types and networks fragment, it’s becoming increasingly important to take an open approach,” said Radi Abd El Haj, chief executive of RS2.

“Payment acquirers and processors need to offer choice, flexibility and ultimately openness, to ensure they can meet retailer and consumer demands. Open Payment platforms are essential to respond to these short-term changes, but more importantly, lay the foundation to capitalise on the value chains of the future,” he concluded.

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