Consulting and technology services firm Capgemini has compiled a list of the top 10 trends that will affect the payments industry in the coming 12 months.

The paper Top 10 Trends in Payments in 2016 identifies the technological, economic and demographic developments that are having an impact on the payments industry. These include the proliferation of fintech start-ups such as Ripple and other non-bank tech giants such as Apple, Facebook, Google and Amazon, which are causing disruption and disintermediation across the financial sector. Technological and digital innovation, such as mobile and instant payments, are driven by the retail sector but business-to-business (B2B) payments are sure to follow suit. Meanwhile, blockchain solutions are likely to change they way payments are made, especially cross-border.

The 10 factors listed in the white paper are:

1. Payments value chain continues to witness front-end innovation. Mobile and social platforms are driving the demand for new services in the retail and merchant spaces. For example: contactless technologies (such as near field communication/NFC, Bluetooth low energy, Quick response code and Host card emulation) as well as the advent of wearable digital gadgets, are enabling payment applications such as mobile wallets (ApplePay), digital wallets from banks (PingIt), P2P apps (Paym, Zapp, Swish), retailer-based closed-loop solutions (CurrentC) and mobile money (Mpesa, bKash).
2. Regulators will increase focus on fostering innovation and encouraging competition, driven by increasing demand for customer data privacy and security and the entry of non-traditional players. Examples include: the Payment Services Directive II in Europe; the UK's Payments Systems Regulator's aim to open up access to Faster Payments Service for non-bank institutions; and the Reserve Bank of India's granting of licenses to establish payments banks providing small savings accounts and remittance services to drive financial inclusion.
3. Payments processing will undergo transformation for building next-generation infrastructure, driven by innovations taking place at the merchant end of the payments value chain and innovations from non-banks.
4. Implementation of immediate payments systems will continue to accelerate globally.
5. Banks and non-banks will focus more on applicability of blockchain technology to financial services, as the distributed ledger feature of the technology continues to be a point of interest for financial services firms.
6. Hidden payments volume growth will further accelerate. The entry of non-traditional payment mechanisms, many of which are offered by non-banking players that are not subject to the same regulations as some traditional providers, means more payments are going unreported.
7. Payment service providers (PSPs) will increase focus on leveraging insights and data to offer value-added services. In many cases PSPs aim to engage customer loyalty by providing customised products and services.
8. B2C and corporate payments will drive global cross-border payments volume. Cross-Border payments represent a significant payments market and banks and non-banks are increasingly competing to gain market share. The high penetration of mobile banking and innovative mobile financial service offerings in the regions of Africa and Latin America have led to a surge of firms offering low-value cross-border payments by offering mobile virtual network services.
9. Increased investments in security and authentication measures to avoid fraud and data breaches. Measures such as the Chip Authentication Program, 3D Secure, tokenisation, and biometrics are gaining significant attention.
10. Developing economies are witnessing disruptive innovation in payments and are leapfrogging the developed nations. For example, innovative payment models are coming out of regulatory and industry initiatives in developing economies such as Africa, Bangladesh, India, and the Philippines.