By O.B. Rawls IV
iPayment Inc.
Last year was a pivotal year for the payments industry and its surrounding ecosystem. We saw the introduction of new, disrupting players; major consolidation in the form of mergers and acquisitions; and an ever-changing array of innovative value-added solutions, all of which have helped to expand our collective offering and truly transform our industry.
In 2018, I expect we'll see a lot of what we saw last year – and more. Here are five payments industry predictions for 2018:
From beginning to end, 2017 was a year filled with major M&A announcements and activity, so it should come as no surprise that I predict continued consolidation within the industry. It's a trend that has existed in payments for a long time, and as new entrants, disruptive technologies and innovative business models continue to impact the payments landscape, we'll continue to see investment or outright acquisition within the space.
POS and mobile-based applications have had a tremendous impact in our industry. They've given lower-tiered merchants the opportunity to afford advanced business tools and have altered the types of solutions acquirers offer to merchants.
Over the past few years, we've seen solutions like Clover introduce product extensions to help meet merchants' needs and demands, especially with regard to mobile technologies. I don't expect that to slow down. Other competitors will continue to play catch-up and innovate to help further the convenience and practicality of applications and mobile-based hardware.
Every year it seems that big-box retailers improve on ecommerce and omnichannel operations. This has caused somewhat of a disparity gap for many small and midsize businesses (SMBs) in recent years. Even though SMBs carry less legacy baggage and can usually scale easier than national brands, it's been difficult for smaller, regional businesses to realize omnichannel capabilities.
However, now that SMBs are incorporating more POS and smart solutions, I believe we will finally see a commitment to data and operational fluidity, paving the way for SMBs to finally solve the omnichannel challenge.
Cryptocurrency was a popular topic in 2017, mainly for its market volatility. It's well documented that many large, online retailers already accept cryptocurrency as a payment method, but I do not predict we'll see cryptocurrency accepted at major department stores just yet. It will take financial institutions, financial regulators and the card brands more time to recognize cryptocurrency as a formal payment method. Until that happens, I don't think we'll see mainstream use.
During my career, I've learned that companies and innovations we consider to be disruptors are almost always disrupted themselves. New business models and solutions will continue to shape offerings within the industry, and to be truly transformative, they will need to be innovative.
In the past few years, we've seen the introduction of payfac models that offer simplified pricing and POS and marketing services that extend the role of payment providers with their customers. For such a long time, the industry competed on price, but this influx of new solutions has helped create more well-rounded acquisition and selling practices, most of which are here to stay and will continue to evolve.
As is the case with most industries these days, technology is changing everything. And with payments specifically, I think it's the speed of technology that's really having an impact on the industry. Our customer base is also changing – they have a lot more experience with technology and are more aware of the inner workings of the competitive landscape.
These factors are prompting many questions about the nature of our industry and our businesses. We must ask ourselves: who are we, what are we, and how can we use innovation to help build and maintain relationships with our customers?
2018 will be a big year for payments and I, for one, am excited for the challenges that lie ahead. 
O.B. Rawls IV, Chief Executive Officer and President of iPayment Inc., has a proven record of achievement in the payments, banking and technology sectors. At iPayment, which provides payment processing solutions for small and midsize businesses (SMBs) throughout the United States, he oversees a staff of over 400 serving more than 150,000 SMB customers. Contact him at pturiano@ipaymentinc.com.
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