Top 3 Payments Trends for 2011

Experts Eye Mobility via Social Networks, Partnerships, ACH

Tracy Kitten, Managing Editor

The payments landscape is poised for big changes in 2011. The top three trends expected to have the greatest impact: payments facilitated through social networks, partnerships between financial institutions and innovative non-financial vendors, and investments in new options for mobile transactions and Automated Clearing House .

From a mobile perspective, the expected adoption of the EMV chip & PIN standard, as well as heightened use of prepaid cards, will play significant roles, too.
The EMV discussion is not new. Some industry experts, including Randy Vanderhoof, executive director of the Smart Card Alliance, say mobile and EMV-like chip payments go hand in hand.

"By 2011, we can expect to see more NFC (near-field communications) enabled devices," Vanderhoof says. Once that happens, the connection between mobile and contactless chip payments will be bridged. With an estimated 75 million contactless chip cards already in use in the United Sates, Vanderhoof says it's time for the payments industry to have serious discussions about linking contactless and mobile.

From the prepaid angle, the link to mobile has already been established, and competition is closing in, says Cindy Merritt, assistant director of the Federal Reserve Bank of Atlanta's Retail Payments Risk Forum. "We're seeing a lot more activity on the part of telecoms, which are starting to provide services on a prepaid basis via the mobile channel," she says. "They are allowing consumers to make payments and have those payments appear on their phone bills."

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