Payment trends continue to be driven by consumer wants and concerns: convenience, choice and security are determining payment technologies prevalence and adoption. Here are some of the trends that we at Mellon see as the most dominant for 2015.

Wearable payments
The launch of the Apple Watch and Android Wear may be the make-it-or-break-it moment for wearable payments. PayPal has announced that it will be among the first to enable such payments for its customers, whereas Barclays aims to start testing its bPay wristbands in July 2015. Added to them, the NFC Ring can be used with a Bitcoin wallet to enable wearable payments.

Mobile wallets
Juniper Research expects mobile wallets to become commonplace within 2015, offering a streamlined payment experience, as the checkout process becomes quicker and easier. Nowadays, Starbucks holds the leading position in mobile payments processing 7 million payments a week in the US. With mobile wallets reaching 450 million by 2017, mobile operators are currently developing their own solutions to avoid working with Apple Pay and Google Wallet.

NFC
NFC, which stands for Near Field Communication, is expected to grow 38% between 2011 and 2016, with the NFC market reaching more than $10 billion. Compared to QR technology, NFC provides faster, two-way communication enabling merchants to offer coupons back on their customers’ smartphones. In 2015, NFC will be widely used for e-ticketing, micropayments and Electronic business card exchange.

Mobile banking
As people are becoming more tech-savvy and banks go digital, there is an increasing demand for the same functionalities and level of security across mobile banking platforms. According to Gemalto, leader in digital security, managing and issuing payment credentials for all payment devices, will prove to be a real challenge for the banks in 2015.

Rewards 2.0
A recent report from PwC indicates that there will be opportunities for companies in the payments industry to take advantage of customer data and build highly targeted loyalty schemes. The customer’s location, purchase history, browsing habits, response to marketing activities, and type of cards used are only some of the data points that payments companies can help retailers evaluate in order to make rewards programs more relevant to their customers. The success in “big data” era depends on the way in which data are integrated in the “customer journey”.

All-in-one payment cards
Connected devices and plastic cards with displays bring debit, credit, gift, loyalty and membership cards under one single card offering a high level of simplicity to end-users and an innovative way for banks to manage multiple accounts. These “all-in-one” cards come with highly sophisticated features and can connect to mobile wallets offering a complete cashless experience.

Tokenization
There has been a long discussion and an increased consumer demand around tokenization and encryption in order to replace sensitive card data and answer the security gaps in the EMV standard. The roadmap is still blurred with companies asking for a common security standard and questioning the impact of the changes needed to be done to the existing payment systems.

Virtual currencies
Governments are looking for frameworks to regulate virtual currencies and make them part of our everyday transactions. New York is considering establishing virtual currency exchanges and using BitLicense framework as a model for banks and insurance companies. In the months to come, it is highly anticipated that digital currencies will be used interchangeably with legal tender, creating a new payment system that will expand beyond the existing financial ecosystem.