Experts expect worldwide trends like more complex customer journeys, digital wallets, embedded payments, augmented reality, new buy now, pay later (BNPL) options, and digital currencies to progress the sector. Each will affect how merchants and customers globally engage and transact as they grow more popular.

Digital and cashless payments are growing worldwide. According to a study, worldwide cashless payment volumes are expected to reach around 1.9 trillion transactions by 2025, an 80% increase from 2020. Digital payments are accelerating due to post-pandemic consumer attitudes and behavior changes.

Prominent trends experts expect in 2023

1.Customer Experience 

As global recession fears grow, businesses must focus on meeting customer demand and preferences throughout the customer journey. Responding to customer expectations with more digital interactions requires understanding how people shop and what they expect from companies. In a world of many purchase options, merchants must keep customers. Loyalty and incentives programs for specific customer categories can boost credit card spend.

2. Merchants adopts Fixable Payments Options

In response to changing consumer buying behaviors, more merchant sites are offering flexible digital payment choices at various points of the buying process. Merchants are improving core customer journeys with flexible payments. The trend is projected to continue as more people want frictionless shopping and payments. As digital payments speed and additional payment kinds become available, Juniper Research Head of Research Nick Maynard says there will be new opportunities to take quickly rising payment forms. Maynard said QR codes and biometric payment cards are examples of payment innovations.

3.Acquirers are working with software providers

Merchants are using embedded finance and ISVs (independent software vendor) to implement new transaction methods as customers want frictionless online interactions.

According to 451 Research, part of S&P Global Market Intelligence, predicts that embedded finance will emerge in 2023 when loyal companies integrate payments into nonfinancial client journeys. Millennials are especially interested in financial services from nonfinancial retailers and brands, at 37%.4 Merchants can offer unique payment experiences on social media, rewards sites, and loyalty programs with embedded financial solutions.

4. Buy Now Pay Later

Strong demand for flexible and alternative payments is driving new BNPL solutions. Already popular, BNPL has moved into new spending and retail areas to penetrate worldwide markets. Millennial and Gen Z consumers fuel BNPL demand, according to data. Global growth is expected during the next five years. Payment choices in Europe show consumer preferences for delayed payments and BNPL

5. Rise of Augmented Reality (AR).

Many people window-shop and buy online, so firms are using AR to attract them. Tech-driven Gen Z consumers are eager to spend money on immersive virtual reality and AR experiences that mimic in-store purchases. Select brands are also targeting younger gamers who buy in virtual worlds.

6. Contactless Payments

According to recent research, mobile wallets are anticipated to rise rapidly over the next few years, extending the global trend toward contactless payments. Card- and ACH-funded digital wallets will grow, according to London-based RBR analysts. Mobile wallets are predicted to expand 18% annually and 129% globally between 2022 and 2027.10 Payment wearables are another global trend, with a 124% growth rate projected over the next five years due to its ease and convenience.

7. Provide quick and customized experience

Brands and merchants differentiate through personalizing consumer experiences. In the year ahead and beyond, enabling diverse and flexible payment methods, from digital wallets to BNPL to cryptocurrency, will be crucial. Buyer satisfaction rises when shoppers have more payment options. Real-time payments were also the emerging payments use case most appealing to consumers, with 86% being interested in receiving payouts from businesses in real time and 85% in paying bills and having them post to an account in real time.

8. Central Bank Digital Currencies

Although not yet widespread, Central Bank Digital Currencies are gaining popularity worldwide. Nick Maynard of Juniper Research said CBDCs will have a big influence as central banks expedite their plans. The Bank for International Settlements found that over 90% of central banks were involved in CBDC activity. Although large economies have no immediate plans to use digital currencies,  countries have completely launched them, so businesses should be aware that central banks and governments remain interested.

resources

PwC, 2021. “Navigating the payments matrix.”

² Euromonitor International, November 2022. “World Market for Consumer Finance.”

³ Boston Consulting Group, October 2022. “Global Payments 2022, The New Growth Game.”

⁴ 451 Research, part of S&P Global Intelligence, December 2022. “2023 Trends in Fintech.”

⁵ McKinsey & Co., October 2022. “Embedded Finance: Who will lead the next payments revolution?” Viewed 10 November 2022.

⁶ Juniper Research, August 2022. “Buy Now Pay Later, Regulatory Framework, Competitor Leaderboard & Market Forecasts 2022-2027.”

⁷ Nets, January 2022. “2022 – the year ‘future payment trends’ become reality.” Viewed 10 November 2022.

⁸ Forbes, November 2022. “Generation Z Gravitates Towards Immersive Tech-Driven Experiences.” Viewed 24 January 2023

⁹ YPulse, November 2022. “5 Successful brand experiences in the Metaverse.” Viewed 8 November 2022

¹⁰ Juniper Research, December 2022. “Contactless Payments, Key Opportunities, Emerging Trends & Market Forecasts 2022-2027.”

¹¹ Recharge, September 2022. “Mobile payments: Definition, history & trends for 2023.” Viewed 9 November 2022.

¹² 451 Research, part of S&P Global Market Intelligence, Key Findings: Global Fintech Vendor and Consumer Study commissioned by Discover Global Network, completed August 2022.

¹³ Bank for International Settlements, May 2022. Gaining momentum – Results of the 2021 BIS survey on central bank digital currencies. Viewed 10 November 2022.

¹⁴ Atlantic Council. “Central Bank Digital Currency Tracker.” Viewed 16 February 2023.