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TD Bank is targeting microbusiness payments with the launch of its Tap-to-Pay solution that helps turn iPhones into point-of-sale machines. The solution will be rolled out across the U.S. and will target businesses with an annual revenue of less than $100,000 to provide an inexpensive point of service (POS), according to a release from the […]
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Vaidik Trivedi
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Opinions expressed by Entrepreneur contributors are their own.
Mobile entertainment is now a multi-billion-dollar global industry, evolving at breakneck speed as technological advances unlock new possibilities and shape consumer preferences in new and unexpected ways.
Here is a look at the top five trends changing this industry today:
Mobile phones and tablets have become ubiquitous, and user expectations are shifting towards mobile-first experiences optimized for smaller screens as a result. At the same time, leisure time is increasingly becoming a luxury as the pace of life for the active part of the population continues to speed up. One consequence is that users are increasingly drawn to content that can be enjoyed quickly and easily on the go. We have witnessed the rise of platforms like TikTok, Instagram Reels, YouTube Shorts and Yepp, serving up user-generated short-form content to a broad range of audiences.
While there is a lot of discussion about the addictive properties of short-form entertainment, screen time regulation and age restrictions for platforms that offer bite-sized mobile fun, one thing is clear — this type of content has true mass appeal and is likely to remain a major fixture in the mobile entertainment space for the foreseeable future.
Related: 4 Tech Trends Shaping the Future of Media and Entertainment
More reliable connectivity, faster speed and greater proliferation of 5G are also transforming mobile entertainment in their own ways. Better connectivity enables developers to serve up more interactive experiences and data “heavy” formats, such as video streaming and conferencing, audio streaming, podcasting and networked gaming. This democratizes the creation of high-quality live content, which is no longer the exclusive turf of big broadcasting corporations, nor is it reliant upon wifi connectivity and a desktop device.
In addition, the speed and coverage of 5G networks enable more precise location-based services. These enhance mobile entertainment experiences, such as augmented reality games or virtual tours, enabling a more immersive user experience.
With the ability to provide higher-quality and more engaging content, mobile entertainment businesses can unlock new revenue streams, such as subscription-based services or pay-per-view options. By opening the door to more prosperous, more interactive, and more immersive content that can be consumed on the go, improved connectivity directly impacts the possibilities for entertainment on mobile devices and fuelling industry growth.
Artificial intelligence (AI) has a profound effect on mobile entertainment. Using AI-based tools such as machine learning helps developers improve and optimize backend processes like streamlining repetitive tasks, improving content moderation, and enabling leaner teams to achieve results. It also helps provide the more targeted, personalized entertainment experience that consumers have come to expect – serving up content based on a user’s interests and past viewing behavior.
While AI is also making it easier to generate content, including text, images and video, users are increasingly looking for content that feels authentic and relatable – something that is still hard, if not impossible, for AI to produce.
Therefore, when it comes to funny videos, fun memes and similar entertainment, user-generated content is still king for now, while AI works backstage to enhance how it is delivered and consumed.
An argument has been made that mobile technologies are making us less sociable as a society, with some even ringing alarm bells that the art of casual in-person communication is in danger of being lost. After all, look around when riding the subway, and you’ll see most of your fellow passengers with their heads bent over their mobile devices, completely oblivious to their surroundings and more often than not entirely uninterested in striking up any conversations with their fellow passengers (which is not such a bad thing, to be honest). However, within the confines of the digital world, the opposite trend is underway, and consumers increasingly expect entertaining content that is much more social and interactive.
Users are no longer passive consumers who just want to play a game or watch a video. Increasingly, they prefer to interact with other players, share their memes, comment on the videos they watch and otherwise engage with their digital communities and audiences. This trend is prompting the integration of social media functionality into mobile entertainment apps, providing more opportunities for users to interact with others online and within their digital communities.
Related: How to Think Outside Your Industry and Revolutionize the Customer Journey
Advances in augmented reality (AR) and virtual reality (VR) tech have opened new possibilities for mobile entertainment. AR technology allows users to overlay digital content on top of the real world, creating a more engaging and interactive experience for users. Sharing features within social apps enable users to capture and share their AR experiences, such as swapping faces in photos or putting funny filters on images. AR also enables location-based experiences in social apps, which can be used for real-world events or virtual events. Users can interact with digital content tied to their physical location, participate in AR-based scavenger hunts and other location-based games, or engage in pretend play, such as trying on countless pairs of e-sneakers.
As a result of the many AR- and VR-enabled features coming to the market, consumers are starting to expect more immersive, personalized, interactive, real-time, multimodal, and accessible experiences, prompting a higher level of competition among gaming and mobile entertainment companies to meet these expectations.
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Max Kraynov
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Opinions expressed by Entrepreneur contributors are their own.
Propelled by the shift in consumer behavior boosted by the pandemic, our adoption of contactless and digital payments has accelerated economic change in tangible ways, offering improved traceability, accessibility and security both at home and in developing countries far and wide. The market conditions have further been propelled by expanded access to mobile devices. With a majority of the world’s population having a smartphone today — 86.41% according to Statista in 2022 — this further enables the rise in digital payments globally, which is expected to compound annually at about 15% in emerging markets through 2026.
This democratization of payments from traditional financial institutions to telecoms, merchants, fintechs, global brands and more, has enabled the explosion of the Embedded Finance model and a compound effect on customer financial interactions throughout their digital experience.
Related: Payments Wrap: Digital Payments In 2022 And What 2023 Promises
One of the positive externalities of the pandemic is that people are more comfortable than ever making purchases online, whether it’s clothing, consumables or groceries. This willingness to interact in the digital space is no longer limited to the younger generations. Purchasing power is no longer relegated to millennials and Gen Z; it transcends age. It’s not uncommon to see the older generation making payments online, including my 84-year-old father.
As a result of the pandemic, the adoption of digital habits was born out of pure necessity. Today, these habits remain sewn throughout our lives due to their sheer convenience. However, in developing countries, the rapid advancements of fintech payments have done more than make life easier — it’s directly contributed to quality of life, empowerment, human safety and policy enforcement, where the shift from cash to digital payments is still in its infancy.
The acceleration from physical to digital payments will create new digital economies and interactions between sellers and consumers on a local and global scale.
On a recent trip to India, I witnessed first-hand a part of the world’s digital transformation. Having last visited India two years before the pandemic, I was expecting to see little change. This time, however, I found myself standing inside a small, local flower shop that had previously accepted only cash. Today, digital payments have modernized it. Instead of promoting “cash only” signs, most shops I went into now presented me with QR codes and app-based payment options. The flower shop wasn’t any different — but now, it has a sign directing customers to pay by app.
In a few years, India’s economy has been transformed by going cashless (a.k.a. the shift to digital), and they aren’t the only ones. Iteratively, developing countries worldwide have inched their way into digital payments, slowly transforming gray economies with vast income disparity into more transparent, traceable and manageable ecosystems. A symbiotic relationship has developed between the private and public markets, enabling competition, economic growth and choice for consumers while driving traceability and accountability for governments and regulators.
It has also empowered new business commerce and expanded the reach for new gig workers — all through the power of your smartphone and digital payments, which have now been embedded directly into your customer experience with your brand.
For example, in Latin America, the informal economy is one of the main sources of income for much of the population. It was estimated by the OECD (Organization for Economic Co-Operation and Development) that approximately 70% of the GDP was not in the formal payment systems, and, therefore, not controlled by the government in 2018. Now, in 2023, according to McKinsey, only 36% of POS transaction values are in cash.
As a consumer, you have the power to search for any product or service through your mobile phone — and as a gig worker, you can have a constant cash flow through the ease of access to consumers and needs. This win-win scenario creates more of an entrepreneurial mindset for all. It can also threaten big box companies, as small business owners have easier access and less friction. Large and small brands see opportunities and challenges to connect and build a lasting direct relationship with consumers who now have digital optionality everywhere.
Related: How Digital Payments Can Enable SMEs To Become More Competitive In The Post-Pandemic Era
With this continuously evolving scenario, a question comes to mind: How are companies navigating the ecosystem and merging payments into their businesses? The answer to that is data.
Bringing modern payments to emerging markets creates a world of opportunity. By developing a multitude of microcosms, we can bridge the gaps between the various services people need — like doorstep grocery delivery and rideshares — and the digital solutions necessary to facilitate those instantaneous transactions through new customer experiences and payment flows.
In the process, companies collect a wealth of data about consumers that isn’t possible to trace or understand in a primarily cash-based society. By switching to digital payments, companies gain the power to track a consumer from one merchant to another, better understanding transactional and behavioral patterns and moving into hyper-personalization of offers and products. This helps them to understand the services they’re searching for (i.e., what they ate at the last restaurant they visited and which products they are purchasing — down to the SKU and size). This data can transform marketing strategies and reimagines customers’ journey with vendors to drive new offers and loyalty programs in a direct relationship between brands and consumers through their embedded payment flows.
Of course, alongside this data comes the pressing need for payment processors and issuers to manage and use it responsibly. Currently, the payments industry is on track to realizing the potential of new microcosms previously not possible, all while striking a proper balance of consumer consent, reporting and data protection. It’s only a matter of time that the power of the data will create increased knowledge of the consumer and our respective needs.
Related: Business Spending Market In India Is Expected To Reach $15 Trillion: Report
When used correctly, modern payment solutions do not simply create user convenience. Rather, they also improve safety, security and speed at every turn. Moreover, the data behind the payments can transform how we discover and interact with customers. For businesses (small and large), this is an opportunity to create targeted campaigns for consumers, offer services and products with ease and globally, create a consumer-friendly user environment in their platforms and ultimately grow their revenue and client base.
How can this be done? The key to ensuring that payments continue to disrupt our ecosystem positively requires the recognition of a fundamental fact:
The power lies with the consumer, who has more choices than ever. Today’s best financial services companies, ecommerce brands and tech startups are leading the pack as they focus on becoming better partners to their consumers, making them better suppliers.
The explosion of optionality and digital touchpoints between consumers and brands has continued to underscore the criticality of customer experience, digital transformation and data enablement for brands and sellers. Robust engagement through the customer journey for brands will set them apart with consumers who are looking for a consistent and frictionless experience from start to finish.
By fixing our alignment on what’s best for the people at the other end of the equation, the financial services industry has the potential to change the world as we know it — and this change is happening right in front of us today.
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Mamta Rodrigues
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CNN
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Anyone getting paid for their goods and services through apps like Venmo, PayPal or CashApp, or platforms like Etsy and Airbnb, just got a reprieve from the IRS.
Following concerns expressed by the tax community, the electronic transactions industry and some lawmakers, the IRS said Friday it would delay by one year the implementation of a rule change that would have resulted in a virtual paper chase of tax forms going out by January 31, 2023, to anyone using such apps for their business transactions.
The rule change requires third-party payment platforms to issue a 1099-K to the IRS and the app user for business transaction payments if they add up to more than $600 over the course of the year. A business transaction that is taxable is defined as a payment for a good or service, including tips.
It used to be those platforms only had to issue you a 1099-K if you engaged in more than 200 business transactions for which you received total payments of more than $20,000 in a year.
“The IRS and Treasury heard a number of concerns regarding the timeline of implementation of these changes under the American Rescue Plan,” said Acting IRS Commissioner Doug O’Donnell. “To help smooth the transition and ensure clarity for taxpayers, tax professionals and industry, the IRS will delay implementation of the 1099-K changes. The additional time will help reduce confusion during the upcoming 2023 tax filing season and provide more time for taxpayers to prepare and understand the new reporting requirements.”
Indeed, the increase in 1099-Ks issued early next year for people’s 2022 tax returns was expected to be, in a word, “ginormous,” according to Wendy Walker, who chairs the information reporting subgroup on the Internal Revenue Service Advisory Council.
Walker works as a solution principal for Sovos, which helps more than 30,000 business clients with tax compliance, including the issuance of all types of 1099s, of which there are at least 16 different varieties.
Some businesses that only had to issue a couple thousand 1099-Ks under the prior rules were looking at a couple hundred thousand, she noted. “Our clients … have reported enormous increases in their potential filing obligations as result of the threshold change,” Walker said.
Meanwhile, those receiving 1099-Ks for the first time will have to figure out what portion of the amount reported on the form is actually taxable versus what portion represents payments that may be deductible business expenses, such as a fee paid to the payment platform or a credit issued to the business, Walker said.
“People are just not going to understand how to take that gross amount and then work off the deductions to get to their taxable amount.”
The move was welcomed by those representing third-party payment platforms.
“Given the potential confusion the reporting requirement would cause, we applaud the delay, ” said Scott Talbott, spokesman for the Electronic Transactions Association. “The $600 reporting requirement is not worth the problems it would cause. ETA will keep working to increase the threshold to a realistic amount.”
How does ETA define realistic? A threshold that falls between $10,000 and $20,000, Talbott said. “ETA supports a reporting threshold that ties into regular businesses and not consumers occasionally selling a handbag or a bike online.”
The new rule doesn’t impose any additional taxes on anyone. Nor does it change your obligation as a taxpayer to always report to the IRS all of your taxable income from your business activities.
But the 1099-K reporting will make it harder for someone to evade the taxes they owe by underreporting their business income.
The rule also does not apply to personal transactions you conduct on an electronic payment platform. For example, if a friend sends you money through Venmo to help pay for a dinner out or your mother sends you some spending money.
Lastly, the 1099-K reporting rule does not apply to any transactions made through Zelle. That’s because Zelle is a payments clearinghouse that connects the payer’s bank account directly to the receiver’s bank account. “Zelle facilitates messaging between financial institutions, but does not hold accounts or handle settlement of funds,” the company said in a statement earlier this year.
But the IRS may still get reporting on at least some of your business transactions on Zelle, Walker said.
If there is a business-to-business payment over the Zelle network, the business that makes the payment must provide the receiving business and the IRS with either a 1099-NEC for non-employee compensation or a 1099-MISC for other expenses, she explained.
Like the 1099-K, those other forms also provide information to the IRS that will make it harder for businesses to understate their income in a tax year.
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Retail payments is undergoing a profound and ground-breaking transformation in Switzerland, which is having a significant impact on consumers, merchants and corporates as well as on banks and payment service providers.
From transaction commodity…
Retail payments are payments made by consumers when purchasing products and services from merchants and corporates.
Cash has long been the undisputed number one means of payment in daily use as well as in the form of foreign currencies for travel and payments abroad. Credit cards were mostly used by consumers for travel activities and were not very popular with merchants due to high commission costs.
Making retail payments was a static and inflexible activity carried out at the end of every purchase.
… to customer centricity
Not any longer!
Retail payments are undergoing a profound and ground-breaking transformation, which has a significant impact on consumers, merchants and corporates as well as on banks and payment service providers.
Digitalisation has taken us into a new era in retail payments, with new payment solutions from payment service providers and changes in consumer behaviour. This has resulted in a dynamic retail payments ecosystem.
Consumers are buying more and more products and services online or via a mobile device or contactless payment. In addition to credit and debit cards, there are alternative, non-card payment methods such as PayPal, TWINT and Klarna.
Contactless payments by card became well-established during the COVID-19 pandemic, especially among consumers who had previously paid by cash.
‘Mobile first’ (retail payments that are made with or on a mobile phone, tablet or smartwatch) is also popular and 15.8%* of all purchases and payment transactions are now carried out via mobile devices. This includes both peer-to-peer as well as business to consumer payments.
New methods for retail payments are not just an issue for merchants, but also for corporates such as insurance companies that take money from customers. A perfect fusion in the purchase process is defined as embedded payments or in-app payments, the payment process that can be processed directly in the app of the merchant or corporate.
Consumers today expect flexibility in the ways that they shop and pay for purchases, whether in-store or online, but they want payments to be fast and simple.
Retail payments are becoming customer-centric, and consumers decide where, when and how they want to pay. Accordingly, retailers and corporates are aligning the shopping and payment experience with what consumers expect.
What now?
Merchants or corporates who receive retail payments and payment service providers need to ensure that their payments systems are modernised to meet current and developing demand from consumers for digital payments.
Due to the growth of retail payments, the cost structure for merchants and corporates has become more dominant as before. Hence, for merchants this is the best moment to consider the future Interchange++ cost structure of retail payments.
*Swisspaymentsmonitor.ch
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Lena Woodward
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CNN
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Apple on Tuesday launched an option in its digital wallet allowing customers to pay for online purchases in installments, making it the latest company to embrace the buy now, pay later trend.
The new feature, called Apple Pay Later, lets customers split payments for purchases into four installments over six weeks, with the first installment due at the time of purchase. Apple users can also apply for a loan within the Wallet app, ranging from $50 to $1000, with no interest or fees, to make online or in-app purchases.
The payment option is rolling out to select users in the United States now, with plans to offer it to all eligible customers over the next several months, according to a company release. Apple first teased the feature last year.
Apple’s move comes as a growing number of consumers have turned to buy now, pay later services to stretch their budgets at a time of high inflation and broader economic uncertainty. Other popular services that offer the same payment option include Affirm, Klarna and Afterpay.
But some economists and consumer advocates have raised concerns that these services could cause shoppers to take on more debt.
The installment process makes it seem like someone is paying practically nothing for the goods or service they’re acquiring, Terri R. Bradford, a research specialist in payment systems for the Kansas City Federal Reserve, previously told CNN. “So the possibility is that you could, in your mind, think of everything that you’re buying in those four installments and, as a result, take on more debt than you would if you had to pay for them in full each and every time.”
But Apple says the new feature is “designed with users’ financial health in mind.”
“There’s no one-size-fits-all approach when it comes to how people manage their finances,” said Jennifer Bailey, Apple’s vice president of Apple Pay and Apple Wallet, in Tuesday’s release. “Many people are looking for flexible payment options, which is why we’re excited to provide our users with Apple Pay Later.”
Apple users will be able to track and manage upcoming loan payments in the Wallet app. Any loan application can also be done in the app with no impact on credit, according to the company.
Apple’s Pay Later option is enabled through the Mastercard Installments program.
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