Industry Trends on Payments
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Industry Trends on Payments
The payments sector has seen a significant transformation over the past ten years. The process was accelerated by the COVID-19 pandemic, which also sped up the digital transformation in the banking industry. It is interesting to note that this trend is expected to continue for a while.
Within both the consumer and corporate sectors, a significant shift continues across the payments industry. The growth of real-time payments, the increased access to and use of customer data, the expansion of consumer choice within digital and traditional payment methods, and the enhanced competition and collaboration between tech giants and traditional banks are key discussion topics. These emerging and continuing shifts are forcing businesses to reconsider their operating models to drive innovation and customer acceptance.
Trend 1: Expanding Payment Options
The options for people to make payments are certain to expand in 2023. That is because many fintech companies, banks, retail businesses, and crowdfunding platforms will be investing a lot more money in modern technologies and innovative solutions to satisfy their customers. They will be offering them flexible choices ranging from contactless in-store payment methods to various online options.
The new digital payment methods that more merchants will accept in the coming months include pay-by-link, QR codes, email money transfers, virtual debit and credit cards, digital wallets and mobile wallets. Anticipated regulatory shifts in favour of digital currencies worldwide may encourage some merchants to start accepting payments by central bank digital currencies (CBDCs) and crypto cards.
Trend 2: Rising Instalment Payments (Buy Now, Pay Later)
Instalment payment plans, or “buy now, pay later” (BNPL) options, used to be offered by mostly in-store electronic retailers and furniture companies. But due to the rise of BNPL apps like Klarna and Clearpay and the growing preference of young consumers for the flexibility of modern instalment payments, many e-commerce merchants and brick-and-mortar stores now offer buy-now-pay-later options.
Sellers at online shopping sites like eBay and Amazon can now allow their customers to spread their payments for items purchased over days, weeks, or months, depending on the terms of the BNPL provider. Experts predict that more stores will offer this digital instalment payment plan in 2023.
Trend 3: B2B Payments Digitization
Historically, business-to-consumer (B2C) payments have undergone faster digitization than those made in business-to-business (B2B) transactions. However, in the coming months, experts predict that there will be a digital transformation of the business-to-business (B2B) payments market globally. This shift will be driven by the need to meet the new expectations of suppliers and vendors since the start of efforts to recover from the supply chain disruptions caused by the COVID-19 pandemic.
As B2B payment gets more digitized in 2023, a common manual practice like the writing of paper cheques is expected to be replaced by digital methods like sharing payment links and QR codes. Reducing manual processes through the digitizing of invoices, vendor payments, accounts payable, accounts receivable, expense reimbursement, and other B2B transactions enables businesses to significantly minimize operating costs—saving both money and time.
Conclusion
During COVID-19 lockdowns, many people adopted digital behaviors, accelerating the proliferation of mobile-first digital economies and rendering cash even less relevant to daily life than it already was (although in less developed economies, cash remained essential).
Underneath the shift to cashless lies a larger, more profound change. Not only are traditional ways of paying for goods and services — including the humble paper check and analogue invoices — set for radical transformation, but the entire infrastructure of payments is being reshaped, with new business models emerging.
That reshaping involves two parallel trends: an evolution of the front- and back-end parts of the payment system (instant payments; bill payments and request to pay; and plastic cards and digital wallets); and a revolution involving huge structural changes to the payment mix and ecosystem (emergence of so-called “buy now, pay later” offerings; cryptocurrencies; and work underway on central bank digital currencies).
References
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January 24, 2023
Industry Trends on Payments
The payments sector has seen a significant transformation over the past ten years. The process was accelerated by the COVID-19 pandemic, which also sped up the digital transformation in the banking industry. It is interesting to note that this trend is expected to continue for a while.
Within both the consumer and corporate sectors, a significant shift continues across the payments industry. The growth of real-time payments, the increased access to and use of customer data, the expansion of consumer choice within digital and traditional payment methods, and the enhanced competition and collaboration between tech giants and traditional banks are key discussion topics. These emerging and continuing shifts are forcing businesses to reconsider their operating models to drive innovation and customer acceptance.
Trend 1: Expanding Payment Options
The options for people to make payments are certain to expand in 2023. That is because many fintech companies, banks, retail businesses, and crowdfunding platforms will be investing a lot more money in modern technologies and innovative solutions to satisfy their customers. They will be offering them flexible choices ranging from contactless in-store payment methods to various online options.
The new digital payment methods that more merchants will accept in the coming months include pay-by-link, QR codes, email money transfers, virtual debit and credit cards, digital wallets and mobile wallets. Anticipated regulatory shifts in favour of digital currencies worldwide may encourage some merchants to start accepting payments by central bank digital currencies (CBDCs) and crypto cards.
Trend 2: Rising Instalment Payments (Buy Now, Pay Later)
Instalment payment plans, or “buy now, pay later” (BNPL) options, used to be offered by mostly in-store electronic retailers and furniture companies. But due to the rise of BNPL apps like Klarna and Clearpay and the growing preference of young consumers for the flexibility of modern instalment payments, many e-commerce merchants and brick-and-mortar stores now offer buy-now-pay-later options.
Sellers at online shopping sites like eBay and Amazon can now allow their customers to spread their payments for items purchased over days, weeks, or months, depending on the terms of the BNPL provider. Experts predict that more stores will offer this digital instalment payment plan in 2023.
Trend 3: B2B Payments Digitization
Historically, business-to-consumer (B2C) payments have undergone faster digitization than those made in business-to-business (B2B) transactions. However, in the coming months, experts predict that there will be a digital transformation of the business-to-business (B2B) payments market globally. This shift will be driven by the need to meet the new expectations of suppliers and vendors since the start of efforts to recover from the supply chain disruptions caused by the COVID-19 pandemic.
As B2B payment gets more digitized in 2023, a common manual practice like the writing of paper cheques is expected to be replaced by digital methods like sharing payment links and QR codes. Reducing manual processes through the digitizing of invoices, vendor payments, accounts payable, accounts receivable, expense reimbursement, and other B2B transactions enables businesses to significantly minimize operating costs—saving both money and time.
Conclusion
During COVID-19 lockdowns, many people adopted digital behaviors, accelerating the proliferation of mobile-first digital economies and rendering cash even less relevant to daily life than it already was (although in less developed economies, cash remained essential).
Underneath the shift to cashless lies a larger, more profound change. Not only are traditional ways of paying for goods and services — including the humble paper check and analogue invoices — set for radical transformation, but the entire infrastructure of payments is being reshaped, with new business models emerging.
That reshaping involves two parallel trends: an evolution of the front- and back-end parts of the payment system (instant payments; bill payments and request to pay; and plastic cards and digital wallets); and a revolution involving huge structural changes to the payment mix and ecosystem (emergence of so-called “buy now, pay later” offerings; cryptocurrencies; and work underway on central bank digital currencies).
References
Blogs
Industry Trends on Payments
The payments sector has seen a significant transformation over the past ten years. The process was accelerated by the COVID-19 pandemic, which also sped up the digital transformation in the banking industry. It is interesting to note that this trend is expected to continue for a while.
Within both the consumer and corporate sectors, a significant shift continues across the payments industry. The growth of real-time payments, the increased access to and use of customer data, the expansion of consumer choice within digital and traditional payment methods, and the enhanced competition and collaboration between tech giants and traditional banks are key discussion topics. These emerging and continuing shifts are forcing businesses to reconsider their operating models to drive innovation and customer acceptance.
Trend 1: Expanding Payment Options
The options for people to make payments are certain to expand in 2023. That is because many fintech companies, banks, retail businesses, and crowdfunding platforms will be investing a lot more money in modern technologies and innovative solutions to satisfy their customers. They will be offering them flexible choices ranging from contactless in-store payment methods to various online options.
The new digital payment methods that more merchants will accept in the coming months include pay-by-link, QR codes, email money transfers, virtual debit and credit cards, digital wallets and mobile wallets. Anticipated regulatory shifts in favour of digital currencies worldwide may encourage some merchants to start accepting payments by central bank digital currencies (CBDCs) and crypto cards.
Trend 2: Rising Instalment Payments (Buy Now, Pay Later)
Instalment payment plans, or “buy now, pay later” (BNPL) options, used to be offered by mostly in-store electronic retailers and furniture companies. But due to the rise of BNPL apps like Klarna and Clearpay and the growing preference of young consumers for the flexibility of modern instalment payments, many e-commerce merchants and brick-and-mortar stores now offer buy-now-pay-later options.
Sellers at online shopping sites like eBay and Amazon can now allow their customers to spread their payments for items purchased over days, weeks, or months, depending on the terms of the BNPL provider. Experts predict that more stores will offer this digital instalment payment plan in 2023.
Trend 3: B2B Payments Digitization
Historically, business-to-consumer (B2C) payments have undergone faster digitization than those made in business-to-business (B2B) transactions. However, in the coming months, experts predict that there will be a digital transformation of the business-to-business (B2B) payments market globally. This shift will be driven by the need to meet the new expectations of suppliers and vendors since the start of efforts to recover from the supply chain disruptions caused by the COVID-19 pandemic.
As B2B payment gets more digitized in 2023, a common manual practice like the writing of paper cheques is expected to be replaced by digital methods like sharing payment links and QR codes. Reducing manual processes through the digitizing of invoices, vendor payments, accounts payable, accounts receivable, expense reimbursement, and other B2B transactions enables businesses to significantly minimize operating costs—saving both money and time.
Conclusion
During COVID-19 lockdowns, many people adopted digital behaviors, accelerating the proliferation of mobile-first digital economies and rendering cash even less relevant to daily life than it already was (although in less developed economies, cash remained essential).
Underneath the shift to cashless lies a larger, more profound change. Not only are traditional ways of paying for goods and services — including the humble paper check and analogue invoices — set for radical transformation, but the entire infrastructure of payments is being reshaped, with new business models emerging.
That reshaping involves two parallel trends: an evolution of the front- and back-end parts of the payment system (instant payments; bill payments and request to pay; and plastic cards and digital wallets); and a revolution involving huge structural changes to the payment mix and ecosystem (emergence of so-called “buy now, pay later” offerings; cryptocurrencies; and work underway on central bank digital currencies).
References
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