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Living in a world without cards or cash

Wed Dec 11 06:00:00 EST 2019

Looking ahead to 2020, Rob Cameron, CEO Barclaycard Payment Solutions, reflects on key trends playing out in the payments landscape and how they are shaping the future of commerce and business.

Most days I don’t carry any cards or cash, and I leave my house with only my phone. I just tap my mobile or use apps with embedded payment technology. It’s just quick and easy. And because contactless is so popular now, even my teenage kids just use a Pingit keychain so they can manage their spend without a card. You can’t tell they are payment devices so it’s safer for them, plus they have a set amount to spend each week which makes it convenient.

As a consumer trend, there is a shift in mind-set to avoid carrying bank cards, particularly the younger generation. Generally, people want to simplify their payments environments, it’s all about convenience. The same trend is also playing out in the business world where organisations are looking for ways to make it easier to run their businesses.

Complete solutions for payments in and payments out

We’re seeing a trend for our larger clients wanting to have more complete solutions from a single provider, for example, supplying both their gateway and acquiring abilities. They deal with the complexity of servicing their customers across multiple channels, whether it’s in store, in app or online and it’s important to them to have integrated solutions that drive efficiencies. The same applies for clients growing their business internationally. These businesses are looking to players like Barclays to provide a one-stop shop for their e-commerce, gateway and acquiring needs. Over the course of 2019, we completed investments to enable this one-stop offering to our EU clients with our first major client, a top EU retail chain, beginning its migration across more than 10 countries. We expect many more of our existing EU clients, along with new ones, to adopt this proven technology in 2020.

The hospitality sector has been a key growth sector for us as more consumers spend their time on experiences, where the demand is to make paying simpler. This year we announced our partnership with TouchBistro, a leading global i-pad based ePOS solution for restaurants and pubs. Our payments solution is now integrated with TouchBistro helping to improve the speed and accuracy of the bill paying process for both restaurants and diners. Throughout 2020, we plan to add similar new partnerships that integrate payments within apps across a variety of other vertical sectors where there is a need. So stay tuned as they go live.

Similarly, when it comes to corporates making payments out, clients also want a simple and seamless end-to-end procurement experience. On the commercial payments side, our partnership with SAP which went live this year, brings together procurement and payment in one place enabling buyers to take advantage of prompt payment discounts and flexible working capital. Users also have access to personalised, data-led insights helping them make smarter payment and procurement decisions.

Navigating regulation and reducing fraud

New European regulation came in to play earlier this year, leading merchants to think about their customer journeys. Secure Customer Authentication (SCA) legislation aims to tackle fraud and requires all transactions to go through a two-factor authentication process, with  some exemptions. One expected consequence of this change is that the extra friction in the buying process could lead to an increase in cart abandonment and ultimately lost revenues for retailers.

To help our merchants prepare for SCA, we launched Barclaycard Transact which allows us to protect the customer journeys, and also helps retailers manage fraud. This was the first example of us offering a platform product, where we leveraged our unique perspective as the UK’s largest issuer and acquirer to create a product specifically to handle SCA exemptions. Going forward, we will continue to navigate our customers through these regulations and also help them understand the potential that Open Banking can bring to their business.

The Black Friday Effect

With ongoing economic uncertainty in the UK, we are seeing limited growth in consumer spending with shoppers feeling cautious about their finances and seeking out value, particularly in the run up to holidays. Black Friday though continues to see record transactions and Barclaycard data showed that sales volumes for the full week of Black Friday (Monday 25th Nov – Monday 2nd Dec 2019) were up 7.14 per cent compared to last year.

Shoppers took full advantage of the discounts on offer; on Black Friday itself sales volumes were 7.2 per cent higher compared to last year, while sales value was also up 16.5 per cent. This continued right though to Cyber Monday where we saw sales increase 6.9 per cent compared to 2018 data. These figures show that consumers have not only been buying more, but also spending more than last year – which will no doubt come as welcome news to the retail sector as the countdown to Christmas gets underway.

As a trend, we are seeing Christmas spending shift to earlier in the year, as consumers try to take advantage of sales when they come up. Retailers are recognising they also need to move inventory earlier as they are also concerned about the economic uncertainty. The spend period is extended to a whole week of strong activity leading up to Black Friday and going in to Cyber Monday. That’s has a knock-on impact on the traditional Boxing Day sales, which are becoming less of a shopping event and moving to more family Christmas experiences.

Helping businesses succeed in 2020

2019 has definitely been a year of evolution when it comes to payments. We are seeing the continuous shift towards more seamless and invisible consumer payments, and I count myself and my kids as part of that growing trend. The same is true for business payments – both from the standpoint of making payments and also accepting payments.

As we head in to 2020, the rising expectation from small and large corporate customers is that complexity is taken out of the process helping them to save time and money. At Barclays, we understand that and we are able to provide a multitude of services and deliver them in a single package that makes life easier for our customers.