We have seen great acceptance of digital money transfer solutions across all businesses over the last two years. Many organisations saw an acceleration in 2020 that analysts did not predict for the next seven years. And the march toward payments industry transformation is still ongoing.
In 2022, executives are fine-tuning the improvements they’ve implemented and are beginning to see online payment solutions better tactically to generate financial impact and the final results rather than just playing a supporting role.
Looking ahead to 2022, we anticipate that digital transformation will fuel innovation and open up new possibilities across industries. Financial firms will continue to create innovative ways to make transactions as simple. and smooth as possible as payments grow quicker and more effectively. Here are the top digital payment trends to watch in 2022.
As an Industry Standard, Smart Payment Routing
When customers embraced the digital revolution and began ordering everything online. There was a significant shift in how businesses reacted to new payment features.
Payment providers are using payment orchestration to automate streamlining transaction approvals, which may help them increase revenue and enhance client relations.
Increased internet sales resulted in more false decreases. Before the pandemic, false decreases led to the cancellation of 2.6 percent of all purchases, resulting in thousands of dollars wasted each year. Payment orchestration made it easier to integrate merchant sites and payment services on the frontend and backend.
Payment orchestration allows transactions to be routed to the highest performing processor, resulting in more excellent approval rates. As per Payment Orchestration for Worldwide Commerce, the global payment processing market is predicted to rise by 20% between 2021 and 2026.
Increase in Remittance Payments
The need to move money across borders has increased in recent years. Migrant workers are abandoning large banks favouring businesses that make transactions easier and less expensive.
Money contributed abroad may be used to offer accommodation, healthcare, and food, particularly in light of the COVID pandemic. Many of them rely on it as their sole income during difficult times.
The pandemic aided in accelerating one of the most significant digital changes in 2020. This trend is expected to continue as additional competitors enter the market using direct-to-consumer digital services.
With a monthly remittance industry of 200 million employees, there is space for relatively low digital transfer providers to gain a significant proportion of new consumers.
The Function of Cybersecurity
While people are more at ease making online transactions, scammers have devised new tactics to take advantage of a developing business. As e-commerce grows, cybersecurity will remain a significant focus in 2022.
As the reliance on technology continues to grow, so does the importance of cybersecurity. Cybersecurity is the practice of protecting electronic information from unauthorized access or theft. With the increase in cyberattacks, it is more important than ever to have strong cybersecurity measures in place.
Faster non-cash transfers present another hurdle for many anti-fraud strategies. Because shopping behaviour has changed since the epidemic, forecasting it has become more challenging than ever.
Unexpected payments narrow the timeframe for anti-fraud solutions that allow machine learning. And artificial intelligence to detect unlawful transactions, allowing criminals to transfer money undetected.
According to the Nison Report, fraud is predicted to cost the card industry over $400 billion in spending. During the same period, cryptocurrencies are gaining popularity as the benefits of online currencies rises. As bitcoin becomes more popular, it carries its own set of frauds and digital criminality.
One strategy to combat the growth of fraud is to adopt digital IDs, which may be game-changers in transaction processing and user information management.
Additional Services are Available with Mobile Wallets
Most individuals today have one or the other mobile wallets on their smartphone. And as contactless payments grow more popular, more people are utilising them every day. According to Fiserv’s FinTech adoption data, 68 percent of individuals used a mobile wallet in 2021, an increase of 18% from 2020.
Companies like Square and PayPal have been increasingly integrating additional banking capabilities into “super apps” available in the Asian Financial market for years. These applications provide several extra services, such as BNPL, P2P payments, and bank and savings accounts.
PayPal, a digital payment company with 377 million active users, announced plans to create a super app that would serve as a one-stop-shop for their users’ needs, in-store payments. And hosting digital transactions, loyalty programmes, QR code payments, shopping, investing, and various money management tools.
BNPL is gaining popularity
As demand for “Buy Now, Pay Later” (BNPL) payment options grows, the market becomes congested with BNPL players. Banks and smaller fintech firms are vying with central and mid-tier banking to provide the most outstanding deal to their customers.
BNPL has profited from e-commerce development in the last year. And as rising inflation compels customers to utilise instalments, they are eager to use BNPL services.
According to a Statista study, the number of individuals utilising BNPL in the United States has increase over the previous year and is expect to rise further in 2022.
Payment Optimization for Maximum ROI
Many businesses experienced rapid migration to digital payments due to the epidemic. This year, organisations will transition from the patched digital money transfer solutions they first used to more cost-effective, systematic payment systems that generate significant ROI.
Businesses will accelerate their efforts to optimise authorisation rates, consolidate vendors, and decrease technical debt.
Businesses will look to necessary payment KPIs and streamline vendors to ensure that their prices are functioning. In 2022, companies must become aware of their authorisation rates. And optimise them to obtain full value on their payment investments.
As we approach 2022, the payments sector shows no slowing pace when it comes to online payment solutions. This year will undoubtedly offer fascinating innovation and competition, from cross-border fund transfer to the growth of BNPL. And the emergence of new security technologies as some of the top digital payment trends.
Customers have an unprecedented range of services to pick from, and even large corporations may begin to move in that way. More collaborations, such as the one involving Visa and PayPal, will emerge. And we will see what the volatile cryptocurrency market has in store for us.
These payment industry transformations will determine how the online payments sector and the driving force behind market dynamics will be affect in 2022.