The New Reality of Payments is a “Quest for Simplification.” Are You Ready?

By Mike Bradley, Senior VP of Growth, Infinicept

This recent piece from Forrester Principal Analyst Jacob Morgan, Simplicity Underpins Future Payment Fabric And The Future Of Payments, caught my attention.

Laying out the firm’s perspective on the future of payments and what the infrastructure will look like, Morgan argues that the next challenge in an industry rocked by significant innovation in the past few years is a “quest for simplification.”

His first prediction about future payments technology is that it will be “encapsulated,” with payments being distributed at “the point of need.”

What we’re really talking about here is the further – and total – shift of payments to software. Morgan’s language of “payment fabric” connotes software platforms and a rich componentry for building and supporting ever more diverse use cases. Ultimately, software will own all aspects of the customer experience and relationship.

The Forrester piece argues that payments will be “contextualized,” meaning that providers will be “wrapping value-added services into bespoke platform solutions designed for an industry or scenario.”

Contextualization is the ultimate expression of embedding payments or embedding a financial function. How will payments platforms position themselves to be “embedded” in context? What should software platforms be looking for when setting their payments strategy?

The payment industry’s challenge is to morph to this new reality, providing flexibility, access and simplicity. The newer entrants – companies like Stripe, Adyen and Square – have led the way and are showing the industry where it needs to go.

Finally, what Morgan describes as the “democratization” and “programmability” of payments leans into the next generation – a truly innovative phase of payments using DeFi-based technologies. Are you ready for that?