2016: What to Expect from the Payments Industry

December 31, 2015 11:01 PM

It's impossible to predict the future, but many companies in the payments industry have already made commitments that will shape the year ahead. Here are a few things to expect in 2016.

A customer uses a Lloyds Bank Visa Inc. debit card to make a contactless payment on a Verifone Systems Inc. payment device in London, U.K., on Friday, May 22, 2015. Credit and debit cards that can be used by tapping the reader are gaining users, and mobile apps are set to further boost the popularity of contactless paying. Photographer: Simon Dawson/Bloomberg

Simon Dawson/Bloomberg

Visa's Family Reunion

U.S.-based Visa Inc. is in the process of purchasing Visa Europe, a deal that is set to close in 2016. The reunified Visa will have the benefit of Visa Inc.'s resources combined with Visa Europe's local expertise in emerging technology.

Wolfe, Daniel

Retailers Go Big in Mobile

The late-2015 debut of Walmart Pay, followed closely by reports of an upcoming Target Pay, show that the mega-retailers are pushing ahead with their plans to disrupt mobile payments, even if it means requiring consumers to download a separate app for each store.

The CurrentC application (app) is displayed on an Apple Inc. iPhone 5s in this arranged photograph in Washington, D.C., U.S., on Thursday, Oct. 30, 2014. CurrentC, the retailer-backed mobile-payment system touted as an alternative to Apple Inc.'s platform, was hacked during a test of the technology, resulting in some e-mail addresses being stolen. Photographer: Andrew Harrer/Bloomberg

Andrew Harrer/Bloomberg

CurrentC Gets Current

The big retailers are also pushing ahead with the CurrentC mobile wallet, which is likely to come out of testing in 2016. The app can already be downloaded by consumers even if they don't live in the mobile wallet's test markets.

Samsung Electronics Co. Galaxy S6 Edge Plus smartphones sit on a surface in London, U.K., on Tuesday, July 28, 2015. Samsung unveiled bigger-screen versions of the S6 and Note smartphones featuring its own mobile-payment service, as the company races to protect a narrowing market lead over Apple Inc.'s iPhone. Photographer: Matthew Lloyd/Bloomberg

Matthew Lloyd/Bloomberg

Beyond 'Pay'

Apple Pay, Android Pay and Samsung Pay were designed as pure payment instruments, but they have individually set in motion plans to branch out with other functions, such as loyalty and e-commerce.

An employee sets up an Apple Watch for a customer at an Apple Inc. store, in New York, U.S., on Wednesday, June 17, 2015. Apple Inc. is rolling out a "Reserve & Pickup" system which allows customers to choose a Watch online then buy and collect the order in store. Photographer: Victor J. Blue/Bloomberg

Victor J. Blue/Bloomberg

Wearables' Reality Check

Whether it's a Kickstarter-funded project like the Kerv ring or a massive consumer product like the Apple Watch, more wearable computing devices are coming with payment capabilities built-in. But do consumers really want to use their jewelry to pay? Banks and tech companies will get their answer in 2016.

EMV Sinks In

The U.S. shift to EMV-chip card security began in earnest in 2015 when the card networks' Oct. 1 deadline arrived, shifting the fraud liability for in-store purchases based on each party's support of EMV technology. Now that the consequences are real, more retailers and issuers are switching over.

PayPal's Public Proving Ground

2016 will be PayPal's first full year as an independent company following its separation from eBay. Already the payments company is positioning itself as an ally to traditional outsiders such as Facebook, but it will need to continue exploring new opportunities to please its investors.

An attendee reaches for a cup of coffee at Starbucks Corp.'s 400,000 square foot Leadership Lab in the George R. Brown Convention Center during the company's Global Leadership Conference in Houston, Texas, U.S., on Thursday, Oct., 4, 2012. Starbucks Corp. Chief Executive Officer Howard Schultz said his company plans to add 1,000 stores in the U.S. in the next five years. Photographer: F. Carter Smith/Bloomberg

F. Carter Smith/Bloomberg

Starbucks' Grande Vision

Starbucks is a pioneer in mobile payments largely because it has a different goal in mind. Unlike banks and tech firms, it's not trying to kill off cash and plastic. Instead, it's working to shorten lines in its stores and improve the value of its rewards program. To this end, Starbucks' current focus is on line-busting tech like mobile ordering and delivery.

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Faster Payments, Phase Two

In the U.S., the Fed's Faster Payments Task Force will begin its second phase, when it will study the various criteria it is in the process of establishing now. Proposal development and assessment will take most of the next year, with a communication phase beginning in 2017.