THE USAGE of emerging digital payments solutions is expected to pick up further in 2019, displacing legacy payment options such as cash and credit cards, an analytics software firm predicted.
In a statement, Fair Isaac Corp. (FICO) said emerging payment solutions such as mobile wallets and peer-to-peer payment networks are “cementing themselves in the day-to-day lives of consumers,” particularly the younger generations.
“Big strides are already made in Asia Pacific with mobile payment usage climbing 30% in 2018, the trend is only going to accelerate in the coming year,” FICO said.
Emerging payments solutions are seen to become more mature next year as the companies will pay attention on educating their customers and adapting their fraud controls to counter threats from cybercriminals.
In a previous statement, FICO said 2018 will be the “beginning of the end for physical credit cards” as digital payment schemes gain prominence.
In the country, banks and other financial institutions have been enhancing and foraying into electronic payments, in line with the push of the Bangko Sentral ng Pilipinas to promote the shift into a “cash-lite” economy where financial transactions veer away from cash and check and toward electronic fund transfers and digital wallets.
The main goal is to increase the share of electronic payments to 20% of all transactions by 2020, from only a percent share in 2013.
Aside from the maturing payment solutions, FICO also predicted that banks will invest on deposit pricing strategies this year as lenders might face issues from growing or at least sustaining their deposits base given the “current rising rate environment.”
“Sophisticated analytics tools, like optimization, and the ability to rapidly deploy the models developed by those tools will give banks the ability to deliver smarter, more granular pricing, enabling them to compete effectively in this increasingly frenetic environment,” the analytics software firm said.
FICO added that banks undergoing digital transformation will realize they have a silos problem, as isolated business units and technology stacks for credit risk and fraud among others “work poorly” when it comes to large-scale transformation.
“Banks will increasingly recognize this and work to [improve] the negative effects of silos as they shift from product-centric to customer-centric business strategies.” — K.A.N. Vidal