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5 payment trends to watch in 2023

5 payment trends to watch in 2023

As a result of the pandemic, new payment trends are sticking instead of consumers returning to previous payment methods. The use of digital payments is rapidly replacing traditional methods such as cash and credit cards.

The key to lowering processing costs and increasing revenue in 2023 will be turning payment strategies into revenue accelerators. In the coming year, here are five payment trends to watch:

1. Account to Account (A2A) payments will be the preferred APMs

Since 2015, card fees have increased by more than 13 percent in the UK alone. As we move forward in 2023, the true cost of cards will be revealed, as Forrester predicts at least one global retailer will experiment with a ‘pay by bank’ mechanism, passing along the savings from card fees.

This move is aided by a decrease in conversion rates due to Strong Customer Authentication and an increase in fear of debt among younger generations.

As A2A payments perform better than cards when it comes to refunds, consumers prefer this option. Account-to-Account refunds settle almost immediately after the merchant receives the returned goods instead of taking several days.

2. A continued increase in fraud and security challenges

Globally, eCommerce merchants are expected to lose $48 billion in 2023, up 16 percent from $41 billion this year. The expansion of eCommerce, non-cash payments, and cyber threats will drive an increased emphasis on cybersecurity in payments in 2023.

Banks and fintechs may see potential impacts of the European Commission’s legislation to update and refine regulations for digital IDs. If digital IDs become widely used and regulated in a way that permits interoperability with digital wallets in 2023, banks and financial services could gain access to personal information that will simplify and speed up the process of performing customer checks, anti-money laundering duties, and potentially many other regulatory tasks.

3. Growth and change of mobile wallets

A variety of digital wallet options, including Apple Pay, Google Pay, Shop Pay, and others, are now commonplace at checkout counters in addition to traditional payment methods.

Approximately 60 percent of the world’s population is anticipated to adopt mobile wallet technology over the next three years. The number of mobile wallets is expected to reach 4.8 billion by 2025, up from 2.8 billion in 2020.

Digital wallet adoption is predicted to have significant impacts both in the eastern and western hemispheres. In the coming years, consumers will be able to make payments to their friends and family with mobile wallets, which will affect the way money is exchanged in society.

In conclusion, in 2023, if you do not provide your customers with the option of using a digital wallet, you are limiting their payment options and missing out on profit.

4. More transactional data insights

Abandoned carts will continue to be a major problem for eCommerce businesses in 2023. Nearly half of consumers have abandoned transactions due to insufficient payment options.

Analysing your transactional data can help you pinpoint abandonment rates, highlight behaviours, identify trends, and implement changes or innovations effectively.

Customers have increased expectations, which have made eCommerce businesses realise that they must expand and innovate to truly understand their customers, which includes transactional insights.

5. Acceleration of BNPL

The BNPL market is expected to top USD 576 billion by 2023, driven by the increasing popularity of online shopping and the demand for convenience. As BNPL platforms gain popularity, consumers are more likely to fall into debt in an uncertain economic environment.

BNPL is offered by over 150 providers worldwide, but in virtually every country, it is not fully regulated or protected. In 2023, it is expected that regulation of the BNPL sector will be applied in the UK, which will have an effect on enabling this payment option at checkout.

In the future, we’ll undoubtedly see further growth from BNPL – but the key focus in 2023 will be on staying on the right side of regulators and providing consumers with a fair and transparent product.

How to stay on top of the latest payment trends

We at Trust Payments are fully committed to accelerating customers’ revenue through payments. We can help you meet the needs of your growing business. With our TRU Connect solution, payments are frictionless, fast, and easily accessible for all.

Learn more by contacting us today.

By |2023-01-12T15:47:59+00:00January 12, 2023|Acquiring, Blogs, Online Payments, POS|Comments Off on 5 payment trends to watch in 2023

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