Payment habits and trends in the changing e-landscape 2010+

Payment services are constantly developing. However, current payment methods have developed out of paper-based services during a period with severe limitations on ICT resources. These limitations have now almost entirely disappeared, and customers are interested in new forms of digitalised and integrated payment instruments. Within the payment industry, we can see a trend towards internationally standardised network-based services, as in several other similarly ICT-dependent industries. This publication seeks to summarise current development trends, user demands, cost and pricing issues, technology and business trends as well as official views on payment developments. It endeavours to identify the most important factors affecting future payment habits for the period post-2010. Based on the analysis, technological developments will support completely integrated electronic payments processed in real time. The mobile phone seems likely to become an important device for initiation and acceptance of payments. The information conveyed as part of a payment transaction will be extended to encompass all information necessary for further and later use (for example, ordering and invoicing data). However, the prevailing practice of widespread (cross-)subsidisation makes it hard for end-users to perceive the actual cost differences between alternative means of payment, thus delaying the adoption of more efficient payment habits. The current market structures also contain strong barriers to competition in the form of monopoly, oligopoly or service provider cooperation. Official measures by authorities to increase competition along the lines of modern policies for other network industries would speed up developments in payment services as well. Keywords: payment services, electronic payments, payment trends, future payment instruments JEL classification: G10, G18, F15, H4, L86, O33