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Future of payments

Published July 5, 2023

Banking, commerce and payments are all continually shifting landscapes where acceleration in digital adoption and advances in technology are driving significant change in how consumers transact. Digital-first is a common theme in payments, as businesses shift more to online and digital platforms to meet consumer expectations and drive business efficiencies.

Here are five top trends shaking up the payments space in 2023.

1» Digital / mobile wallets
Mobile wallets are growing in use because they meet consumers’ desire for frictionless transactions wherever and whenever they want. According to Capgemini, the use of mobile wallets is set to increase, with more than 60% of transactions being made by mobile wallets in the next three years as consumers continue to prioritize cashless payment methods.

What’s more, digital wallets are also becoming embedded into eCommerce, making payments almost instantaneous. And it’s the younger generation that is leading the way in digital wallet use. From ride-sharing to food ordering or the next ‘super app’ that hits the market, digital wallets make it easy for customers to pay without cash or credit cards.

2» Metaverse
The metaverse is seen as the future for the next generation. It will move even more of our lives online—both professionally and personally, taking healthcare, education, training and online shopping all to the next level.

But while an exciting opportunity, there are risks too, particularly around the amount of personal information collected in a virtual platform. Organizations will have a responsibility to protect and manage transactions between businesses and consumers. Technology, security and risk management will continue to be a focus with the ongoing increases in cyberattacks and data and privacy breaches.

3» Connected Commerce
Commerce is one of the most agile industries. Driven by evolving consumer demands, businesses must adapt fast to keep one step ahead to be successful. The stakes are high. Consumers are increasingly fickle and happy to move their loyalty elsewhere.

Consumers expect seamless connections across all their channels. Switching easily between social media, eCommerce, mobile apps and different payment methods—debit, credit and gift card, plus buy now, pay later are all no longer nice-to-haves, but essential requirements for merchants. Today’s consumer expects choice in how they purchase and demand a frictionless journey from app, to online, to store.

Customer experience is critical and will drive the success or failure of a business. Social media platforms have moved beyond information sharing to become eCommerce platforms in their own right, where brands sell directly to consumers. The result is the expansion of embedded payments to create a consistent and simple payment experience across all channels.

$992B was spent on social media commerce in 2020 and eCommerce sales are expected to increase by 10.4% in 2023.

Source: Forbes

4» Cloud payments
As connected commerce and digital wallets expand consumer payment choices, these cloud-based payment portals require businesses to ensure that data security is top of mind.

Responsibility for securing data and protecting privacy falls to the business, not the consumer. A breach has the potential to wreak significant reputation damage and be a costly error. That’s why businesses should partner with payment processors committed to delivering the most secure technology platforms that keep data safe.

Regulatory requirements for cloud payments fall under the policies of the Payment Card Industry (PCI) Security Standards Council and help businesses answer the most challenging compliance questions.

While customer experience and offering frictionless payment options are crucial to attracting customers, having rigid security processes in place to protect customers’ data is critical to retaining them.

5» Security & Risk Management
As commerce becomes more digital, cybersecurity and risk management are even more critical and complicated. Last year was a record year for cyberattacks and breaches according to research by Checkpoint.

Forbes states that $992B was spent on social media commerce in 2020 and eCommerce sales are expected to increase by 10.4% in 2023. This increase in online transactions means there’s a wealth of rich customer data being shared electronically—and it is a highly attractive target to criminals. This makes it critical for businesses to evaluate their processes to stay ahead and constantly prioritize risk management.

Here, artificial intelligence and predictive analytics will play a significant role in helping protect, manage and grow business. Criminal threats and technological advances place businesses in a constant state of transformation with a need to maintain a robust security strategy that adapts to the shifting payment trends.

A better bottom line.

Payment processing tips every merchant should know.

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