The rapid acceptance of digital payments has been incredible, with more development occurring worldwide in the last two years than in the previous decade. According to Grandview Research, the epidemic has resulted in a global increase of 41% in real-time payments.
To keep up with market needs and demands, trends in digital payments sector are always shifting and evolving. Due to the epidemic, the digital form of payment has emerged in the last two years. Digital payment transactions have exploded all over the world. Faster, frictionless, contactless payment, integrated, and transparent payments are now available.
In an ever-changing market, it’s critical to remain on top of what’s in demand. You’ll need to keep an eye on the horizon and be ready for whatever comes next. In this post, we will look at the top digital payment trends that are anticipated to influence digital payment patterns in 2022.
Top Digital payment trends
Demand for Mobile Point of Sale
Mobile-point-of-sale (mPOS) is a revolutionary technology that frees merchants from the constraints of their physical locations and in-store payments. It enables them to go to a variety of locations, including concerts, trade shows, food trucks, and other events where they can quickly make money from their customers.
Not only that, but mPOS technology improves a store’s payment process by making it more efficient and adaptable by replacing central checkout facilities with sales employees armed with mPOS devices. Statistics show that mPOS will be a popular digital payment method in the future. According to Global Market Insights, mPOS will grow at a CAGR of 19% (approx.) between 2020 and 2026.
Adoption of Blockchain Technology
A surge in payment fraud and charge backs must be addressed immediately. Blockchain technology is used to improve data security, reduce fraud, combat cybercrime, and promote trust among payment chain participants.
A blockchain, as the name implies, is a series of blocks linked together. Each block has a unique id, timestamp, and payment data, which is added to the current chain using a cryptographic hash. All participants can see transaction blocks, but they can’t change them without other participants’ approval.
Blockchain technology has been increasingly used in payments:
- It is real-time since financial transactions take only seconds to complete.
- The elimination of intermediaries decreases payment costs
- It is both secure and transparent
Buy Now, Pay Later
In this epidemic, the Buy Now, Pay Later option was a lifesaver to customers since it allowed them to pay in installments over their desired time frame. There are no hidden fees or charges, and the process is simple and quick, therefore it has gained widespread acceptance.
This payment method is offered by PayPal, Zip, Affirm, Amount, Sezzle, Spitlit, Klarna, and Afterpay, among others. More solutions will emerge, and existing solutions will be updated to include this payment method.
Artificial Intelligence and Machine learning
The old fraud detection methods have become obsolete due to advancements in payment technologies. Real-time payment systems require real-time fraud detection systems.
This is where artificial intelligence and machine learning come into play in today’s real-time environment to solve business challenges like cybercrime and digital fraud. Payment solutions will become more customer-centric when artificial intelligence and machine learning are applied to them.
Using machine learning and artificial intelligence to protect client data from fraudulent activities will create a multi-layered real-time fraud solution.
QR code payments
The increased usage of QR codes in recent years has opened up a whole new world of contactless possibilities for shops and customers alike. Using a QR code allows you to make quick purchases by scanning it with your phone, so whether you’re browsing social media or shopping for your favourite online store, virtual payments have never been simpler.
QR codes also operate in real life and have proven to be incredibly useful in the hotel and leisure industries in recent years. They’re less expensive than chip and pin since they don’t require card readers, menus, or nearly as many employees.
In restaurants, for example, you can now scan a code on the table, look at a menu, choose your meal, and pay for it all in the same minute. This was especially useful during the epidemic when only table service was permitted. The globe has learned to adjust to these measures, and the demand for this service continues to rise as individuals seek convenience.
During the pandemic, due to health limitations and safety considerations, the usage of contactless payment systems—touch-free digital payment techniques that employ radio-frequency identification or near field communication for transactions—rose.
Contactless payments can be done using the following methods:
- By using Near-field communication (NFC) enabled credit and debit cards
- Mobile wallets, like Samsung Pay and Apple pay, etc.
Biometric verification is any method by which a person may be uniquely recognized by a technology that analyses one or more identifying biological qualities such as fingerprints, retina patterns, voice recognition, and signatures.
Biometric verification is used by mobile applications and other digital payment agents in the financial services sector to validate a transaction. Smartphones, for example, can send information with a payment request that includes behavioural biometric information. By detecting discrepancies in biometric information and payment behaviour, these extra signals will improve authentication and fraud detection.
Wearable Payment Devices
Customers can use this approach to buy items and services safely. It is a tap-and-go payment system that is built into their smartwatches, wristbands, or smart rings. It’s a great method to make sure your payments are safe and secure. The wearable technology industry is estimated to reach $1.37 trillion by 2027, according to studies.
The ideal way for businesses to profit from all of these developments is to have a payments partner that offers the complete spectrum of capabilities. Consumers’ expectations are shifting from basic transactional interactions to enriched transactional experiences as they become accustomed to things happening rapidly.
In such an environment, established financial institutions have realized the need of establishing connections and reinventing their services or offers to depend on client wants while putting security at the forefront of everything.
Making digital payments is the way of the future. Payment methods will shift from cash to digital in the next few years. Many new trends will emerge and vanish before the transformation is complete.
These developments will have a significant impact on our future payment methods. Many of the above-listed trends will play a significant part in this process as well.