Mubasher: While the payments trend has focused on big buzzword technologies such as artificial intelligence (AI), blockchain, biometrics, and the Internet of Things (IoT) over the past few years, GlobalData’s senior payments analyst, Sam Murrant, revealed that neither of them will lead the payments transformative technology in 2020. 

Indeed, the instant bank-to-bank payments systems will be the most transformative technology for payments in 2020, Murrant noted in a press release on Thursday.

He added that while there are plenty of applications that facilitate sending money in real time between bank accounts, electronic payments at the point-of-sale (POS) sound more valuable.

“Instant payment systems can offer much lower processing costs than cards, making them attractive to merchants. They can also offer functionality such as P2P payments and settlement speeds that card-based payments cannot match,” he clarified.

The development of TIPS, a cross-border instant payment system, was the top achievement made in 2019, as it does not only allow transfers between participating banks within the Eurozone, but is also considered an ‘out of the box’ step from the domestic payments markets for such systems.

Moreover, instant payments have demonstrated their ability in the US market, as shown by the popularity of the Zelle P2P payments service.

“The difficulty in making these systems a true challenge to the card-based infrastructure that dominates the cross-border payments market, though, is in making them interoperable with one another. Once that starts to happen, the card-based infrastructure will rapidly fade into the background.”

“In the immediate term, these systems will continue to build domestic momentum, leading up to challenging the card schemes at the point of sale,” he concluded.