In turn, merchants, big and small, are enhancing the checkout experience by supporting multiple payment methods to cater to changing needs of customers and provide a consistent payment experience.

The evolution of the industry is being further propelled by the rise of FinTech. In the past, the payment ecosystem was largely dominated by banks. However, non-bank players are starting to gain market share by challenging old business models and expanding the value chain with customer-driven innovations. According to an Accenture report, the largest share (40 percent) of 2015 Asia-Pacific FinTech investment deals was in payments.

Developments in emerging technologies such as AI, blockchain, and IoT are now bringing in the next era of transformation in payments, fuelled by the demand for greater convenience, security and efficiency.

What the future holds

With continued technological innovation, we can expect further disruption in the payments landscape.

The ubiquity of personal devices and growing adoption of payment technology will make hardware less important. We will see a shift towards invisible payments, where transactions are completed in the software layer without the need for a credit card or account number.
Developments in acceptance and payment networks will also lead to a bilateral flow of payments – more consumer initiated payments as opposed to just merchant initiated payments.

FinTech will continue to flourish, leading to the emergence of new players and solutions in the market. Due to the rising number of third-party platforms offering payment services, open banking through APIs will be needed to creating a more seamless customer experience. However, not all players will survive in the long run, transaction economics driven by need for scale will ultimately lead to some consolidation in the market.

Despite these disruptions, the payment ecosystem will remain vibrant and provide opportunities for those who can create value through innovation.