PaymentsJournal
SUBSCRIBE
  • Analysts Coverage
  • Truth In Data
  • Podcasts
  • Videos
  • Industry Opinions
  • News
  • Resources
No Result
View All Result
PaymentsJournal
  • Analysts Coverage
  • Truth In Data
  • Podcasts
  • Videos
  • Industry Opinions
  • News
  • Resources
No Result
View All Result
PaymentsJournal
No Result
View All Result

Navigating the Future: Top Digital Payment Trends to Watch

Brian Hanrahan by Brian Hanrahan
March 31, 2023
in Digital Payments, Featured Content, Industry Opinions
0
digital payments
0
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn

In 2020, the line between the online and offline worlds blurred as the digital economy became the business norm. The pandemic accelerated the adoption of digital payment methods and significantly changed consumer behaviour. As a result, industries and ecosystems rapidly adapted to the new reality. 

Fast forward to now, digital payment transactions are projected to reach a staggering $9.68 trillion, thanks to the continued growth of digital wallets, virtual cards, and open banking. These advancements have made payment methods more versatile, faster, and secure. 

Digital payments are now embedded into consumers’ daily lives, with access to mobile devices providing both convenience and efficiency. If merchants are to retain existing customers and attract new ones, they must continue to embrace new payment methods.  

Digital Wallets Are Gaining Traction 

A digital wallet stores a user’s credit and debit card information on a mobile device, such as a phone or watch. It’s estimated that by 2026, 5.2 billion people will use digital wallets to make payments. That’s more than half of the world’s population using digital wallets in just three years. Interestingly, QR codes are expected to account for 40% of these transactions.   

Digital wallets offer convenience and flexibility by allowing users to link multiple payment cards or other payment methods, and easily choose their preferred option for each transaction. In addition to digital wallets, contactless card payments have become increasingly popular, with the percentage of contactless card payments at point-of-sale in Europe rising from 41% in 2019 to 62% in 2022, according to a study from the European Central Bank. 

Digital wallets benefit retailers by increasing conversion rates and lowering cart abandonment. Research suggests that the online average for cart abandonment in 2022 was a shocking 70%, with a significant proportion of customers saying that a complicated checkout process causes them to give up. Digital wallets expedite the payment process, making it more straightforward and convenient and ultimately reducing basket abandonment. 

Improving Cash Flow with Virtual Cards 

Virtual cards are unique as they generate a new long virtual card number (VCN) for each transaction. These cards are linked to the user’s bank account, as with traditional debit cards, and are growing in prominence for corporate purchases. In 2021, the global market for virtual cards reached $11.7 billion, and it is set to grow at a compound annual growth rate (CAGR) of 21% to $65 billion by 2030. Many major banks, including Citi, Capital One, and HSBC, now offer virtual card services to their customers.

Virtual cards provide many benefits for B2B payments, including increased control, with 37% of C-suite leaders stating that it was easier to manage spending. The most significant benefit, though, is the improved security that a dynamic VCN brings, as even if the card’s details are exposed in a data breach, these same details cannot be used to make any further payments. Virtual cards have existed for many years, and it’s fair to say they have had a slow burn. Still, the security and control they deliver will encourage greater adoption in the current tumultuous economic climate. 

Unlocking Opportunities with Open Banking 

Open banking continued its upward trajectory, with the number of active UK users reaching 7 million in February this year. Customers can initiate payments to merchants through their online banking or mobile banking app. This increases both the speed and efficiency of payments, reducing checkout time for the consumer and processing time for the merchant.

Crucially for merchants, open banking payments deliver instant settlement, supporting improved cash flow. Our Merchant Perceptions report revealed one in four (25%) merchants predicted open banking will become the most popular payment method among consumers within five years’ time. 

Another key benefit of open banking is the significant decrease in payment fraud, as much as 34%, as found in our research. This is due to the enhanced security measures in place for open banking payments, which seamlessly comply with Strong Customer Authentication (SCA) regulations and often involve biometric verification through a mobile device, providing added protection for both merchants and customers. 

As technology and consumer demand continue to disrupt the market, this year will undoubtedly see further digital payment technology innovation. If merchants continue to adopt payment methods aligned with a better consumer experience, they will improve consumer satisfaction with the checkout process and reap the benefits.

Tags: Cash flowDigital PaymentsDigital WalletsOpen BankingVirtual cards
0
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn

    Analyst Coverage, Payments Data, and News Delivered Daily

    Sign up for the PaymentsJournal Newsletter to get exclusive insight and data from Javelin Strategy & Research analysts and industry professionals.

    Must Reads

    Google Wallet Expands Features

    Google Wallet Continues to Bet on Digital with Expanded Features

    June 2, 2023
    digital value

    How Embracing Digital Value Can Help Solve the B2C Payments Conundrum

    June 1, 2023
    instant payments, real-time payments, RTP

    Banks Developing Instant Payments Products in the U.S. Should Focus on Billers to Generate New Revenue Streams  

    May 31, 2023
    Digital Wallet Use Delivers on Convenience and Security

    Digital Wallet Use Delivers on Convenience and Security

    May 30, 2023
    5 Ways to Protect Your Financial Institution from a Cyberattack

    5 Ways to Protect Your Financial Institution from a Cyberattack

    May 26, 2023
    traditional banks

    How Traditional Banks Can Modernize Without Risk

    May 25, 2023
    identity fraud

    Javelin’s Identity Fraud Study Highlights the Changing Nature of Fraud

    May 24, 2023
    SASE, security-as-a-service

    Security-as-a-Service Secures
    Distributed IT Models

    May 23, 2023

    Linkedin-in Twitter

    Advertise With Us | About Us | Terms of Use | Privacy Policy | Subscribe
    ©2023 PaymentsJournal.com

    • Analysts Coverage
    • Truth In Data
    • Podcasts
    • Videos
    Menu
    • Analysts Coverage
    • Truth In Data
    • Podcasts
    • Videos
    • Industry Opinions
    • Recent News
    • Resources
    Menu
    • Industry Opinions
    • Recent News
    • Resources
    • Analysts Coverage
    • Truth In Data
    • Podcasts
    • Industry Opinions
    • Faster Payments
    • News
    • Jobs
    • Events
    No Result
    View All Result