Like other industries, the payment sector was hit during the 2020 pandemic, with revenue declining by 5%. However, what happened in this period was a chance to reflect on the current state of payments and an opportunity to plan what the sector needs for the future. This time provided clarity to reflect on the trends such as declining cash usage, in-store to online payments and increasing use of instant payment.
Now, with a recovering global economy, the future looks bright for the payments sector, and a growth of 6-7% per year looks likely, with many predicting this industry will reach $2.5 trillion in 2025.
With the sector set to grow, there is an increasing demand for talent that can help to drive said growth. As many businesses are now struggling to find new hires to meet their needs in payment and IT security sectors, we’re looking at what skills businesses really need so they can adapt to the future of payments.
Beyond The Point Of Sale
In the past, payments were a discrete, standalone process. Now, with the Internet of Things, networking and other factors, payments have become a thriving ecosystem that now encompasses the end-to-end process taking into account all of the services, platforms and systems that play a part in the commerce journey.
What Does The Future Of Payments Look Like?
When considering the talent needs for payment industries, it is important to consider the emerging trends in the sector:
Real-Time Payments
In 2020, real-time payments grew by 41%. A trend that is set to continue as they play an increasingly important role in the global commerce ecosystem. However, as real-time payments increase, there is a greater risk of payment fraud. In 2020, 13.7% of fraud incidences were real-time payment scams, while digital wallet hacks accounted for 6.2% of payment fraud.
With this, IT security requirements will need to increase to help payments stay safe online. This is an in-demand skill for many financial organisations. For example, a search of vacancies at Deutsche Bank lists over 2,000 looking for IT security while JPMC lists around 4,000 roles requiring IT security.
Merchant Focus
Another area of growth in the payment sector is the accessibility of payment options for merchants. Increasing the payment options for merchants enables smaller businesses to reach a wider base of customers. It also helps businesses to grow globally too.
It is this support to SMEs and small businesses that many financial organisations are looking to build, especially with a growing number of SMEs creating a lucrative audience.
Some brands are already working hard to improve payment systems for merchants. For example, Mastercard in India has created a solution known as Soft POS, which allows a smartphone to work as a payment acceptance device.
With new approaches such as virtual shops and solutions that can receive, record and store transactions, organisations will need talent that can help to facilitate these projects and keep delivering creative offerings that help small businesses to grow.
Digital Identity Payments
Through the pandemic, another sector of growth in the payments industry was with digital identity payments. This was important to governments to distribute welfare with ease as well as organisations that deliver social payments based on individual identity.
It is expected the sector will continue to grow to help with expanding ecommerce volumes and rapid, large-scale payments. With digital identity payments, McKinsey believes it is possible to unlock further economic growth of between 3-13% of GDP by 2030.
While there is potential in this sector, there are concerns about the authentication of payments and limits to the levels of security. While there has been an increase in authentication technology, aspects such as two-factor authentication do create more friction points for the customer. Going forward, organisations will need to look at solutions that create an enjoyable payment experience that doesn’t compromise security.
Cross Border Payments
Another area of growth during the pandemic was the rise of cross border payments which grew by 17%. So much so that a 6% revenue growth is predicted for the next five years in this sector. As well as revenue growth, the volume of cross-border payments has grown. For example, SWIFT reported a 10% increase in volume in December 2020 compared to the previous year.
However, with the increase of cross-border payments, there is a demand to get them as up to speed as domestic payments in terms of cost, accessibility, transparency and speed. For this, global projects and enhanced technology will be required to create a universal approach.
Finding The Experts To Enhance The Future Of Payments
With so many challenges and growth opportunities ahead for payments, sourcing the right talent is essential but complex with a diminishing tech talent pool. However, this is where Horton International come into play: we specialise in finding the “needle in the haystack”, the perfect fit for open vacancies.
As industry experts, we know where the future of banking is headed and can source the ideal candidate for any expert level position, from compliance experts in traditional banks to the CTO of a leading FinTech organisation. If you want to find out more about how Horton International can support your organisation and find the talents that will play a vital role in the payment ecosystem, please reach out to our team.
