Mercator Advisory Group Offers 2019 Outlooks on What to Expect in Payments and Banking in the Year Ahead

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2019 Outlooks by leading research and consulting firm provide insights on new trends and opportunities in banking and payments

2019 will emerge as the year when the broader strategies are attached to more tactical objectives and functional products are launched giving the new payment era more clarity and shape.

Mercator Advisory Group has released its complimentary annual series of “Outlooks” providing insights for the year ahead on trends and new themes that will have a significant impact on the payments and banking industries, consumers, and the ways companies do business in 2019 and beyond. The topics addressed in these Outlooks set the foundation for Mercator Advisory Group’s research agenda for the coming year and provide a framework for key points of engagement that Mercator Advisory Group will have with its clients in 2019.

The 2019 Outlooks are presented by each of Mercator Advisory Group’s Advisory Services — Debit and Alternative Products, Credit, Merchant Services, Prepaid, Commercial and Enterprise Payments, and Emerging Technologies — and can be downloaded without charge.

Download Mercator Advisory Group’s 2019 Payments and Banking Outlooks for free here.

2019 Outlook Statements by Advisory Service:

“2018, as predicted, was a year when critical decisions were made that set in motion construction of the underpinnings of faster payments systems and defined much of the direction for payments in the United States. 2019 will emerge as the year when the broader strategies are attached to more tactical objectives and functional products are launched giving the new payment era more clarity and shape. Participants in the payments industry who have not yet articulated their approach will need to do so quickly. Although new payment types always take time to achieve meaningful volume, the market will begin to see evidence of their impact. Because payment types are interconnected, with changes in one payment type affecting others, having a roadmap and a solidified approach for new payments also means determining where existing products will fit in for the long term.” Sarah Grotta, Director, Debit and Alternative Products Advisory Service.

“With slipping return on assets, managers of U.S.-based credit card portfolios must be watchful for economic shifts to ensure that the 470 million cardholders in the United States have the ability to repay their credit responsibilities if the economic environment changes.” Brian Riley, Director, Credit Advisory Service

"In 2019, development and adoption of mobile wallets will continue, but mainly on the merchant side. Device manufacturers’ wallets still struggle with growth; while signups may be growing, we are not seeing comparable growth in usage. Rewards will be a key driver here, along with mobile order-and-pay and mobile self-checkout. Grocery stores will expand their online pickup and delivery services. Conversational or voice-activated commerce will expand, led by Amazon’s Alexa service and its competitors, reaching a variety of devices including cars.” Raymond Pucci, Associate Director, Research Services

“The regulations known as the Prepaid Accounts Rule go into effect April 1, 2019, and that is just the tip of the iceberg of changes that will affect prepaid cards in the United States in 2019. Technological change and economic and political factors will also influence the success of prepaid. The economic outlook is generally quite positive, but there are clouds gathering in the form of higher interest rates, disappointing corporate earnings despite the corporate tax cut, and the possibility of one or more trade wars that may affect different industries to varying degrees. Also, the current expansion has been going on for eight years, and many observers feel a recession is inevitable, if not in 2019, then in 2020. Since certain categories of prepaid, such as government benefit cards, are countercyclical, we may see a reversal of recent declines. We are also seeing some interesting uses of prepaid cards for purposes such as spending cryptocurrency, which will make them a focus on innovation.” C. Sue Brown, Director, Prepaid Advisory Service

"Looking forward in the commercial payments industry for the next 12–18 months, Mercator Advisory Group sees digital transition as an overriding priority. Corporations need to increase digital execution across their cash-cycle functions, and they want the accessibility and usability of banking and payments services to reflect modern technologic capabilities. Players in the financial services industry therefore must continue their focus on the four themes we present in this Outlook on commercial and enterprise payments for 2019. Networked services that digitally link cash-cycle operations allow corporates to optimize working capital. The effective harnessing of data is a key to unlocking the vast potential of artificial intelligence for multiple purposes. As we move toward what are likely to be seismic shifts in the ecosystem across the industrial world, banks need to adapt and deliver what corporate clients need. All of this occurs in the face of risk management challenges inherent to the financial services industry, spearheaded by the ever-present fraudsters seeking new methods to extract wealth from the system. Financial institutions and other industry service providers will have a greater chance of long-term success by delivering on these themes.” Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service

"We predict 2019 will see many emerging technologies come to market, including machine learning, application programming interfaces (APIs), identity verification using biometrics and blockchain, and partnerships between fintechs and established firms. This increased velocity will be driven in part by continued growth in the U.S. economy as well as dollars injected into the fintech space by venture capital. The funding in 2018 was extraordinary, and it looks like investment in fintechs in 2019 will be even larger. High-tech startups will therefore have the funds needed to go on the attack. Financial institutions will need to examine their high-margin businesses and prepare for them to come under attack as attractive targets.” Tim Sloane, VP, Payments Innovation, and Director, Emerging Technologies Advisory Service

Download Mercator Advisory Group’s 2018 Payments and Banking Outlooks for free here.

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About Mercator Advisory Group:
Mercator Advisory Group is the leading independent research and advisory services firm exclusively focused on the payments and banking industries. We deliver pragmatic and timely research and advice designed to help our clients uncover the most lucrative opportunities to maximize revenue growth and contain costs. Our clients range from the world's largest payment issuers, acquirers, processors, merchants and associations to leading technology providers and investors. Mercator Advisory Group is also the publisher of the online payments and banking news and information portal

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