Digital
payments are taking over at lightning speed, revolutionizing how consumers and
businesses exchange currency. The global transaction value of digital payments
could top a staggering $14.78 trillion by 2027. With innovation in financial
technology accelerating and pioneering startups popping up in fintech hubs like
London, the payments ecosystem in 2024 will likely see disruption on an
unprecedented scale.
Between
surging mobile wallets, cryptocurrencies making inroads, and AI streamlining
processes, the trends poised to shape the sector are both numerous and substantial.
Finance Magnates discussed the three most important ones with Moshe Winegarten,
the Chief Revenue Officer (CRO) of Ecommpay, a payment solutions provider.
Consolidation in Open
Banking
2023 marked
five years since the advent of open banking. While usage grew significantly,
with over 11 million payments made in July, the market saw considerable
consolidation.
“Ecommpay
has seen demand for payment service providers that offer all-in-one solutions
skyrocket,” Winegarten commented.
Moshe Winegarten, the Chief Revenue Officer (CRO) of Ecommpay
Merchants
are increasingly looking for payment partners that provide integrated solutions
encompassing open banking, card payments, and alternative payments . There is
particular interest in features like payment confirmation, third-party
verification, and payout capabilities.
“This
process has only just begun and we can expect to see this consolidation
continue well into 2024, it’ll even extend to orchestration providers as
merchants increasingly look for one solution that reduces friction, cost, and
potential points of failure,” the CRO of Ecommpay forecasted.
Estimated open banking end-user adoption. Source: Open Banking Impact Report
Evolution of Buy Now, Pay
Later
Buy Now,
Pay Later (BNPL) usage surged in 2023 as consumers leveraged these financing
options to manage costs during the economic crisis. New regulations increased
confidence in the BNPL market, though 45% of shoppers still want more
oversight. According to estimates, the value of this market is expected to reach $125 billion within the next three years.
For example, nearly 70% of all PayPal customers in the United States have used the BNPL option at least once over the past 12 months, according to Statista data.
According
to Ecommpay, the usage of BNPL “increased as consumers relied upon the service
more due to the cost-of-living crisis, with 39% of consumers utilizing these
credit options versus 25% in 2022.”
Heading
into 2024, BNPL will continue evolving through regulation to enable responsible
lending. With inflation easing, BNPL provides a way for merchants to capture
growth opportunities while empowering budget-conscious consumers to purchase
what they need over time.
“Ultimately,
responsible lending is vital and must continue to be prioritized in 2024,”
Winegarten said.
Continued Growth of
Localized Payments
With rising
inflation and economic uncertainty in 2023, global businesses have focused heavily
on expansion to reach new markets and customers. However, simply entering a new
geography is not enough, providing localized payment methods that resonate
with local consumers is critical.
Research
shows that if a shopper’s preferred payment method is not available, 72% will
abandon their purchase. Additionally, 82% of consumers indicate that they would trust a
brand more if they saw familiar, local payment options during checkout.
Value of digital transactions. Source: Statista
“In 2023,
consumers singled out travel (32% up from 22% in 2022), hospitality (29% up
from 17%), and retail (26% up from 16%) as the top three sectors that they
believe need to offer better payment options,” Winegarten commented.
In 2024,
the demand for localized payments is expected to grow, especially in emerging
markets like Africa and the Gulf countries. Businesses that invest in offering
the right mix of global and hyper-local payment options will be best positioned
to drive loyalty and sales.
What to Expect in 2024
The payment
landscape will remain dynamic in 2024 as technology and regulations adapt to
emerging business and consumer demands. Companies that closely track these
trends, and adjust their products and services accordingly will gain a
competitive edge.
“Ecommpay
has seen growth in demand for local payment methods – spanning Europe, Asia,
Latin America, and Africa – throughout 2023. Encouragingly, four in five
consumers would trust a brand more if they saw a familiar option at checkout
(82%),” Winegarten concluded. In his opinion, this will be one of the more
important trends over the next year.
Digital
payments are taking over at lightning speed, revolutionizing how consumers and
businesses exchange currency. The global transaction value of digital payments
could top a staggering $14.78 trillion by 2027. With innovation in financial
technology accelerating and pioneering startups popping up in fintech hubs like
London, the payments ecosystem in 2024 will likely see disruption on an
unprecedented scale.
Between
surging mobile wallets, cryptocurrencies making inroads, and AI streamlining
processes, the trends poised to shape the sector are both numerous and substantial.
Finance Magnates discussed the three most important ones with Moshe Winegarten,
the Chief Revenue Officer (CRO) of Ecommpay, a payment solutions provider.
Consolidation in Open
Banking
2023 marked
five years since the advent of open banking. While usage grew significantly,
with over 11 million payments made in July, the market saw considerable
consolidation.
“Ecommpay
has seen demand for payment service providers that offer all-in-one solutions
skyrocket,” Winegarten commented.
Moshe Winegarten, the Chief Revenue Officer (CRO) of Ecommpay
Merchants
are increasingly looking for payment partners that provide integrated solutions
encompassing open banking, card payments, and alternative payments . There is
particular interest in features like payment confirmation, third-party
verification, and payout capabilities.
“This
process has only just begun and we can expect to see this consolidation
continue well into 2024, it’ll even extend to orchestration providers as
merchants increasingly look for one solution that reduces friction, cost, and
potential points of failure,” the CRO of Ecommpay forecasted.
Estimated open banking end-user adoption. Source: Open Banking Impact Report
Evolution of Buy Now, Pay
Later
Buy Now,
Pay Later (BNPL) usage surged in 2023 as consumers leveraged these financing
options to manage costs during the economic crisis. New regulations increased
confidence in the BNPL market, though 45% of shoppers still want more
oversight. According to estimates, the value of this market is expected to reach $125 billion within the next three years.
For example, nearly 70% of all PayPal customers in the United States have used the BNPL option at least once over the past 12 months, according to Statista data.
According
to Ecommpay, the usage of BNPL “increased as consumers relied upon the service
more due to the cost-of-living crisis, with 39% of consumers utilizing these
credit options versus 25% in 2022.”
Heading
into 2024, BNPL will continue evolving through regulation to enable responsible
lending. With inflation easing, BNPL provides a way for merchants to capture
growth opportunities while empowering budget-conscious consumers to purchase
what they need over time.
“Ultimately,
responsible lending is vital and must continue to be prioritized in 2024,”
Winegarten said.
Continued Growth of
Localized Payments
With rising
inflation and economic uncertainty in 2023, global businesses have focused heavily
on expansion to reach new markets and customers. However, simply entering a new
geography is not enough, providing localized payment methods that resonate
with local consumers is critical.
Research
shows that if a shopper’s preferred payment method is not available, 72% will
abandon their purchase. Additionally, 82% of consumers indicate that they would trust a
brand more if they saw familiar, local payment options during checkout.
Value of digital transactions. Source: Statista
“In 2023,
consumers singled out travel (32% up from 22% in 2022), hospitality (29% up
from 17%), and retail (26% up from 16%) as the top three sectors that they
believe need to offer better payment options,” Winegarten commented.
In 2024,
the demand for localized payments is expected to grow, especially in emerging
markets like Africa and the Gulf countries. Businesses that invest in offering
the right mix of global and hyper-local payment options will be best positioned
to drive loyalty and sales.
What to Expect in 2024
The payment
landscape will remain dynamic in 2024 as technology and regulations adapt to
emerging business and consumer demands. Companies that closely track these
trends, and adjust their products and services accordingly will gain a
competitive edge.
“Ecommpay
has seen growth in demand for local payment methods – spanning Europe, Asia,
Latin America, and Africa – throughout 2023. Encouragingly, four in five
consumers would trust a brand more if they saw a familiar option at checkout
(82%),” Winegarten concluded. In his opinion, this will be one of the more
important trends over the next year.
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- Source: https://www.financemagnates.com//fintech/3-digital-payment-trends-you-cant-afford-to-miss-in-2024/
