3 Digital Payment Trends for the Holidays

Interconnected ecosystems are a must for fast, seamless transactions.

Lance Homer
3 Digital Payment Trends for the Holidays

Tis the season to be digital. With Black Friday and Cyber Monday looming near, digital payment trends are front and center in holiday sales forecasts including:[i]

  • Holiday retail sales in the U.S. could reach up to $730.7 billion, a 4.2% increase over 2018.
  • Online holiday shopping in the U.S. may reach $143.9 billion, a 14.1% increase over 2018.
  • Holiday sales are expected to represent about 20% of U.S. and 40% of EMEA total annual retail sales.
  • China’s Singles Day, celebrated Nov 11, is the biggest shopping event in the world. This year it garnered nearly U.S. $70 billion, more than double the projected sales ($29 billion) for Black Friday and Cyber Monday combined.

To capture a share of these growing markets, leading retailers are digitizing the entire customer experience to provide a seamless, blended experience, driven by insight.

Demand for convenient, personalized experiences is shifting the entire shopping and payment process to one of open collaboration across a digital ecosystem of partners behind the scenes. This is driving demand for interconnection, the direct and private exchange of traffic between key business partners.[ii]Interconnecting digital business partners for Financial Services & Payment Providers is projected to account for 10% of all interconnection bandwidth, or 1,300 Tbps, by 2022 according to the Global Interconnection Index (GXI) Volume 3, a study published by Equinix.

3 digital payment trends for the holidays

Transaction ecosystems underpinning the holiday shopping season can include a wide variety of participants including retailers, credit card companies, financial institutions, fraud service providers, mobile wallets, payment processors and more. But regardless of where or how it happens, the data exchange for transactions must be fast, secure and reliable to meet consumer and business expectations. Let’s take a look at some of the hottest holiday digital payment trends:

1. Mobile is merrier. What would the holidays be without long checkout lines? Mobile of course! Retailers are embracing mobile point-of-sale (mPOS) systems that enable their staff to move throughout the store and accept payment from customers wherever they are. Staff can also leverage mPOS devices to engage with customers more directly to check inventory, provide product information or give instant offers.[iii] But to work well, mPOS systems need to be quick. European mobile payments provider iZettle wanted to expand to other regions but was limited by a centralized payment processing infrastructure, located in a single data center in Europe. This would result in unacceptably long lag times for customers in other regions. By setting up a hybrid cloud infrastructure in Equinix International Business Exchange™ (IBX®) data centers, the company was able to expand from one to three continents in just six months while reducing estimated transaction processing times. In Mexico, transaction times were cut by nearly 50%.

2. Avoiding the naughty list: Once the holiday season ends, the last thing shoppers want to see from retailers on their January credit card statement is a list of fraudulent purchases. A growing number of retailers are keeping customer payment credentials safe by using Point-to-Point Encryption (P2PE) from end-to-end at the Point of Sale. FreedomPay, a pioneer in digital payment solutions including P2PE, was experiencing increased global demand and growth and needed to transform its IT infrastructure to better support that new business. Leveraging Equinix Cloud Exchange Fabric™ (ECX Fabric™) and Underlay Networks SD-WAN infrastructure gave FreedomPay the performance and scalability of a software-defined network infrastructure, as well as secure, reliable connectivity to multiple networks, clouds, business partners and customers at significantly lower costs.

3. Santa’s new helpers:  Artificial intelligence (AI) and machine learning (ML) are becoming critical new helpers for retailers and the broader payment ecosystem. These technologies are empowering retailers to deliver better shopping experiences for their customers, from targeted, proximate offers to in-store assistance to streamlined checkout processes. On the payments side, as fraudsters become more sophisticated, AI is helping keep transactions secure by identifying complex patterns through real-time data exchange. ACI Worldwide, a leading payment systems company, harnessed private, low latency interconnection for fast data exchange between its any-to-any payment system, its network and cloud providers, partners and customers. Fast data exchange enabled the company to apply analytics and algorithms for real-time fraud detection.

Interconnecting the digital payments future

Like most industries, the future of payments is wrapped up in making things faster, simpler and more personalized for the customer. That requires open collaboration and fast, secure data exchange within a rich ecosystem of partners to make it work. Traditional architectures based on centralized control can’t cost-effectively scale, respond flexibly to new requirements or comply with regional regulations. To stay in the game, payment processors will need a distributed, digital-edge architecture that gives them proximity to dispersed users, partners, systems, data and clouds across the world.Interconnection Oriented Architecture™ (IOA™) best practices, outlined in the Payment and Commerce digital edge playbook, offer a proven roadmap to success. An IOA approach enables industry leaders to integrate a dynamic ecosystem-based value chain to harness real-time insights, scale a frictionless payment experience at the edge and develop new offerings based on interconnected collaboration.

Read the GXI Volume 3 to learn more about how private interconnection is powering Payments and other industries around the world.





[i]NRF, Winter Holiday FAQs, 2019; Adobe 2019 Holiday Shopping Predictions on Slideshare, Oct 2019;Dynamic Action, 2019 YTD Retail Index Peak & Seasonal Recommendations; AP News, China’s Alibaba, JD report booming Singles Day sales, Nov 2019.

[ii]Interconnection bandwidth is defined as the total capacity provisioned to privately and directly exchange traffic, with a diverse set of partners and providers, at distributed IT exchange points inside carrier-neutral colocation data centers.

[iii]BluePay, The Rise of mPOS; Pymnts.com, How Gap Inc. Builds Relationships With Its ‘Swiss Army’ mPOS, Nov 2018.




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