As the COVID-19 pandemic is still wreaking havoc on businesses around the world, most payment trend forecasts for 2022 rely on digital payment methods. Online shopping is booming, and so are other payment methods. Digital payments have emerged as a crucial enabler of online business, allowing firms of all sizes to expand into new client groups and global markets. Contactless payments, Crypto currencies (P-to-P payment), BNPL solutions, and new customer experiences proved to be long-lasting trends due to increasing digital trend, access and more tailored approaches.
The payment processing ecosystem is constantly evolving with new capabilities. To offer the best client experience, businesses must keep up with the latest trends. It might be difficult for merchants to decide which payment channels to accept because there are so many. With constant innovation and security measures that modernize the purchasing experience, whether in-person or online, digital payments are leading the way in the payments sector.
This post shines a light on top payment trends for businesses to keep an eye on in 2022.
So let’s get started!
1. Buy Now pay later
BNPL is a simple concept. Where consumers purchase a certain item now and make its payment later in installments as per agreement. Previously it was used in big purchases such as cars, electronics, etc. Now everything has become online and businesses are trying to lure consumers by providing multiple payment options for their products or services. BNPL is a hot trend in online payment trends.
Major stores, on the other hand, have lately adopted BNPL as a payment method that may be used for any purchase, no matter how small. The shift toward BNPL is likely to continue.
The rise in BNPL transactions is due to several factors that are benefitting the consumers such as its Omni Channel application and flexibility to pay later on. BNPL is one of the prime reasons for increasing the cash flow in the economy as it has opened doors for almost every consumer coming from upper class to middle class to lower-middle-class families. BNPL is the right method at the right time to enhance businesses and at times give flexibility and time to consumers to pay later.
2. Mobile Wallets
In today’s digital world, the majority of people have at least one digital wallet on their phones. As mobile payments become more popular, more people are utilizing mobile wallets on a daily basis. The convenience, contactless payment, and security of mobile wallets have made them popular. In 2021, according to Fiserv’s FinTech adoption research, 68 percent of individuals will have used a digital wallet, up 18 percent from 2020.
Digital wallets are widely used for both in-person and online transactions using near-field communication (NFC) technology. Users may quickly perform secure transactions by storing their debit and credit cards in an end-to-end encrypted digital wallet. Digital wallets enable a safe, secure, and smooth customer experience at the point of sale.
Providing various payment choices is now standard practice for any company receiving secure payments from clients. Hence, digital wallets will continue to grow as a payment trend.
3. Contactless Credit Card
Contactless credit cards are rapidly gaining traction and popularity. Many stores have already begun to offer contactless cards as a safer payment option. Contactless card payments are often speedier than chip card payments, and they also cause less wear – and – tear on the card. Furthermore, contactless cards are much more secure than magnetic stripe cards and are processed faster.
Businesses should explore taking contactless payments in combination with mobile wallet tap-to-pay usage, as this payment trend continues to be widely accepted by customers.
4. Cross-border Payment
Traditional banking systems have traditionally relied on costly and time-consuming order processing and currency exchange to transfer money from one nation to another. The pandemic has hastened a huge digital change that has established a solid grip in this domain, as it has with so many other movements.
Consumers seeking quicker and faster cross-border transactions have taken an interest in peer-to-peer and other digital options.
5. Cryptocurrency Payment
In the present era, the use of cryptocurrencies for payments has grown. Approximately 21% of survey respondents identified this growth of cryptocurrency as their key motivation for entering the cryptocurrency market.
Although the value of cryptocurrencies is known to fluctuate, the financial potential is the primary reason for ownership, with 43 percent of poll respondents claiming this as their reason for owning bitcoin. Bitcoin is currently accept by major corporations like Microsoft, Tesla, and WeWork.
Because the use of digital payment solutions has become increasingly common, it’s worth keeping a watch on it.
6. Cybersecurity
As the popularity of digital payment solutions grows, so do concerns about fraud and cybersecurity. The increase in advanced digital payment solutions is encouraging cybercriminals and fraudsters to target this increasing market. The expansion of e-commerce and non-cash payments has resulted in an increase in cyber dangers, prompting the industry to focus its efforts on developing new cybersecurity solutions.
Payment providers are investing in more advanced technology and payment security features to address the most critical threats and risks to solve this rising issue. For instance, AI and machine learning are being used by payment providers to improve their security procedures. Artificial intelligence and machine learning monitor for real-time fraud signs and refuse transactions as needed, as well as provide insights into fraudulent transaction trends.
Proactive businesses have also invested in alternative payment methods, such as ACH, that eliminate the danger of chargebacks, to effectively protect themselves against card fraud.
There will be corrupt individuals, scammers, and fraudsters as long as people and businesses deal with each other. As a result, cybersecurity will continue to be a priority now and in the future.
7. Payment Orchestration
Payment orchestration is being use by payment providers to automate the process of transaction approval optimization. It can help them increase revenue and improve client relations. Payment orchestration made it easier for merchant websites and payment service providers to integrate their frontend and backend systems.
Transactions can be direct to the best-performing processor through payment orchestration, resulting in increased approval rates. The worldwide payment processing market is predict to rise 20% yearly between 2021 and 2026, according to Payment Orchestration for Global Commerce.
8. Real-time Payments
Real-time payments are another top digital payment trend that is rapidly gaining traction. It is payment networks work 24*7 and are open-loop. To speed up the process, payments are directly link to personal accounts rather than depending on a prepaid balance.
Real-time payments are already gaining traction in the payment industry. The pandemic has played a big role in the growth of this trend. in 2020, there were 70.3 billion real-time transactions, up 41% from the previous year. In 2020, real-time electronic transactions account for 9.8% of global electronic transactions. And by 2025, that figure is predict to rise to 17.4%.
Conclusion
We can already witness that the payments sector is showing no signs of slowing down in the context of digital payments. The future will be full of fascinating innovation and competition. Ranging from international money transfer services to the growth of BNPL and the creation of new security solutions.
Consumers will have access to an unprecedented range of services, and even large corporations may begin to follow suit. We’ll see more collaborations emerge, such as the one with Visa and PayPal. And we’ll get a taste of what the bitcoin market has in store.
In 2022, these trends will remain the primary drivers of the payments sector and the heart of market dynamics.
