Biggest payments trends for 2023
Fintech and payments trends are constantly changing due to the development of new technologies. If you or your business is still relying on the good old credit-card, we’ve got some news for you in 2023.
Within the last couple of years, we have witnessed technology sprouting with countless new changes and approaches to doing business, empowering their transformative potential.
Technology has even revamped the way we use our money, whether that’s in terms of investing, paying, or banking, so one must wonder what’s in store for 2023.
With that in mind, let’s look at where we’re at right now and delve into 2 of the most important payment trends for 2023, and why should you start planning right now.
Payments Trends Heading into 2023
Digital wallets are closing the gap on overtaking both cash and card as the preferred payment method.
It is no surprise that their easiness to use, fast payment features, and overall convenience have made their adoption rates grow exponentially.
Moreover, COVID accelerated their adoption process as well, with virtual and contactless cards, mobile payments, and other touch-free, convenient solutions.
Accordingly, with e-commerce and m-commerce’s massive growth, digital payments’ value proposition has pivoted not only to become ubiquitous on a global scale but also to deliver a hyper-personalized end-to-end experience with custom-tailored features and payment propositions.
See more: Why 2023 will be the best year to become a tech founder
As both consumers and businesses demand safeguards from identity theft and payment fraud, and the authentication processes is still unwieldy and in dire need of an overhaul.
For example, on digital solutions to Buy Now Pay Later (BNPL) payments which fuel the necessity for shopper ID verification might be very interesting take going forward.
Digital ID Solutions to Redefine Payments?
Digital ID will be a prominent tool for purposes of remote identification and authentication.
Moreover, digital ID solutions may be able to protect their users from personal data abuse while simultaneously shielding the payments system from fraud and other types of financial crime.
PSD2 regulations and open banking solutions will certainly thrive on an integrated digital ID solution as a means of facilitating a payment authentication system.
How Can Digital ID Solutions Revolutionize Payments in 2023?
Uniform standards are being formulated by industry associations and stakeholders in order to build a digital identity ecosystem which brings together both existing and new solutions aimed at achieving inclusivity, trustworthiness, safety, and sustainability.
And, as national identity initiatives are launching all over the world by governments, a shift from traditional payment methods to a digital id approach is likely something no fintech company will want to miss. Shared digital ID infrastructure will certainly have a big role in unifying access and paving the way for an open finance future.
Risks of Digital IDs
Conspiracy theories aside, there are still valid concerns surrounding Digital IDs mainly coming from the cryptocurrency crowd which pushes for individual liberties through decentralization.
Regardless, with governments and other big institutions pushing for it, it looks as if it is inevitable, meaning that Fintechs will certainly want to make use of this tech going forward.
Why Digital May Already Be Irreversible
At this point, altering the traditional payments instruments mix is almost mandatory as the proliferation of next-gen payment methods is undeniable.
Roughly half a decade ago, people were theorizing that by 2030 more than two billion people would be experiencing an entirely virtual banking system. However, that might be a wild overestimate because of how the COVID-19 pandemic completed changed gears in terms of how populations, governments, and businesses are handling their money and digital contactless payments.
As such, the traditional payment instruments like cash, direct debits, credit transfers, and so forth, are steadily evolving into a new instrument mix which gravitates more and more towards digital payments.
To achieve sustained growth, it is expected that the payments industry fully adapts to our newfound reality and either starts or enhances a mix of digital payments instruments which accounts for and embraces next-gen payment methods.
The pandemic has exposed the urgency for businesses, paying firms, and even banks to modernize, update, and innovate their payment systems by either transforming their mix or increasing their affinity to their digital forms.
Consequently, legacy systems are on their way out as customers embrace advanced, more convenient payment options such as e-money payments (connected to their own digital wallets, mobile payments, and so forth).
Biggest Payments Trends to Look for in 2023
Business composability enables organizations to innovate and rapidly adapt to the ever-changing business and consumer demands, something we’ve witnessed closely in effect over the course of the last two years.
In fact, we believe that the rate at which banks have changed over the last decade will seem glacial when compared to the next one.
As such, agility in both businesses and banking has shifted from ‘nice-to-have’ to an actual survival issue, and business apps and business composability will, without question, work as an antidote to the volatility we have all experienced.
The key is that to succeed in a landscape which doesn’t seem to stop changing, one will need to have the ability to create new excellent financial products and services which adapt to these rapidly changing needs much faster than before.
Composability is needed to create sophisticated, digital customer experiences which will help businesses grow, scale, and differentiate.
It will give one’s business the necessary competitive advantage as it will make accentuate one’s biggest strength.
Fintech and Payments Processors in 2023 and Beyond
Payments are a gateway in terms of market entry, but profitability will lie in expanding to other functions.
As such, it is evident that custodians of very vast B2B and B2C transaction data, who employ a composability strategy in tandem with data monetization via data-driven scalpers, may very well shape the future of open finance.
They may achieve this by diversifying their offerings at a faster than ever pace and building ecosystems to cater to a relentlessly changing demand. And, as much as we can’t predict the future with any degree of confidence, we do not have any doubt about the pace at which change will happen.
Source: Finance Magnates
