Making Invisible Payments A Reality

The payments industry is working hard to get consumer payments, for starters, from visible to invisible. The invisible payment, in essence, aims to be part of the background, requiring very little, if any, effort to make a payment. The process is meant to be frustration-free, while maintaining the highest level of security and protection. Does this sound too good to be true? It’s surely a huge undertaking—and it’s taking cooperation between various industry players to make it happen—but we’re definitely getting there.

The Key Word: Omnichannel

The idea is to “fix” what’s kept consumers from fully embracing mobile payments and making them the ubiquitous form of payment—while also supporting omnichannel commerce. The dovetailing of consumer and merchant acceptance creates a win-win: invisible payment solutions deliver a seamless experience for the consumer while enhancing the back-end operations for retailers.

The ideal solution will leverage cutting edge financial technology and the data it generates to enable a frictionless payment that’s available across all sales channels (e.g. in-store, online, mobile) and accessible through any device. What’s more, the invisible payment will be interoperable with all major retailers—a major challenge with today’s popular digital wallets and wide-ranging POS capabilities.

What’s clear is that consumers will enjoy an effortless—and yes, practically invisible—payment experience. But what the invisible payment “system” brings to the back-end is just as seamless. It simplifies the technical and operational complexity required to support different types of payments, eliminating traditionally siloed infrastructures. While making it possible to serve customers no matter where they shop or how they pay, it’s easier to maintain from an operational standpoint. In addition, insights from ACI Universal Payments suggest that this new technology will also simplify global payments and support embedded payments.

An Evolution Toward Invisibility

In The Next Evolution in Commerce: Invisible Payments, i2c, Inc outlines 4 things that must happen to bring the invisible payment to light. There needs to be:

1. Mobile payment standards at the point-of-sale
2. Coordination between Apple and Google to bring consistent coding standards and payment services for app developers
3. Investment in back-end cloud infrastructure
4. Additional education to consumers about the security of mobile payments

That’s a tall order. The invisible payment requires an evolution from the inside-out—or outside-in, depending on each company’s approach to adopting technology. The Smart Insights report Invisible Payments Key to Omni-Channel Commerce report points out that the issues preventing faster payment innovation include legacy systems, existing operating models, lack of a hard business case, costly upgrades, consumer and retailer resistance, and risk management.

Indeed, in the payments industry, most companies, except for the younger and more agile FinTech entrants, have long survived using what we now consider legacy payment systems and operational infrastructures. Many retailers, on the other hand, while offering consumer-friendly (a.k.a. digital) payment methods, may be struggling to update and automate their back-end operations.

The Importance of Openness

Evolution—make that progress—also requires an open business model. Read The Age of the Invisible Payment for background on the invisible payments’ open development environment and what’s driving the quest for the holy grail of faster and easier payments. Yet ACI Universal Payments’ white paper, Openness is Changing the Future of Payments, notes that today’s payments marketplace is only partially open, meaning that payment services are not yet truly easy-to-use, global, and omnichannel.

As mentioned, working toward the invisible payment involves various players in financial services—and the syncing up and sharing of many moving parts. This concept of sharing is central to openness. Banks, for example, are developing capabilities to better serve customers across channels, and advances in this arena will help drive progress in payments and other parts of the industry. Seen in this way, openness will facilitate change.

For insights on progress toward omnichannel banking, turn over to What to Know about Money and Payments in 2020.