It’s a time of reflection and anticipation at The Fintech Times throughout December, as we look back at developments and trends over the last 12 months and forward to the year ahead.
We’re excited to share the thoughts of fintech CEOs and industry leaders from across the globe to 2023’s key takeaways and what we should expect to be top of the agenda in 2024.
Today’s instalment centres on the dynamic field of payments, offering insights and forecasts from industry experts who shed light on the evolution of payment technologies, the importance of customisation and convenience.
Innovating B2B payments
In 2024, there will be an increase in payments digitisation for businesses, driven by the pursuit of efficiency, says Stacey Sterbenz, general manager, UK commercial at American Express.
“Business-to-business (B2B) payments have lagged behind consumer payments when it comes to innovation and leveraging technology. In 2024, we will see an increase in the digitisation of payments as business continue to see the benefits of automation.
“To help maintain healthy cash flow, businesses will look to find efficiencies in their payments processes. Payments automation has been gathering momentum as businesses turn to technology to improve efficiencies and free up finance teams’ time.
“Our recent research found those businesses who have automated payments are reaping the benefits; nearly half (46 per cent) have saved time, and two fifths (39 per cent) have seen fewer errors as a result.
“We’ll continue to see businesses leveraging data and analytics to better understand customers’ behaviour, helping them identify the most efficient digital payment options that help improve working capital. We expect the need for greater efficiency to continue to be a driver of innovation for businesses next year.”
Focus on Pay by Bank
Tom Pope, SVP payments and platforms at Tink, a payment services and data enrichment platform, believes that Pay by Bank has reached a critical juncture in its momentum.
“If you look back over the last 50 years, every payment method that found mainstream adoption – cheques, cards, mobile wallets, buy now, pay later reached a tipping point in its momentum where that adoption became all but inevitable. We believe Pay by Bank has reached that point.
“Only two years ago, Pay by Bank availability was limited to fringe use cases in select markets.
“But now we’ve reached the point where it’s becoming available to merchants everywhere. For example, Adyen, one of the biggest payment platforms in the world, is making it available to all its UK merchants and rolling it out across Europe. And the number of leading companies across all areas of financial services that now have open banking at the core of their offering is increasing all the time.
“Plus, the Pay by Bank user experience – already competitive – is only going to get better. So we think there is a clear advantage for merchants that are early adopters. By tapping into the demand that already exists for a simple, secure, and streamlined payment experience (at low-cost), merchants can differentiate themselves in 2024 from the competition with Pay by Bank.”
The rise of tap-to-pay
2024 will be the year tap-to-pay technology becomes truly embedded in the way small businesses and sole traders take payments, according to Richard Carter, founder of digital payment app Lopay.
“Millions of people already manage their entire life through their smartphone, so for mobile devices to become the primary way we pay for things seems like a natural evolution,” he said.
“The change is already underway. Official data from UK Finance shows that in 2022, 30 per cent of adults were registered with at least one mobile payment service, with that figure climbing to over half among the under-35s.
“Next year we’ll see the technology be embraced beyond these primarily young early adopters. For consumers, the ease of paying for things by just tapping their phone onto a merchant’s phone makes the appeal of tap-to-pay obvious.
“But we’ll also see a big shift among businesses, for whom tap-to-pay removes the need for cash, cards, card readers or tills, reducing their costs and streamlining the sales process. It also removes barriers for businesses who have traditionally only taken cash, as now, with just a mobile phone, anyone can accept contactless payments, wherever they are, in a matter of seconds.”
Wider payment options
Moshe Winegarten, CRO at payment service provider Ecommpay, emphasises the need for diverse payment options.
“The payments industry has enjoyed lots of innovation this year, as well as open banking consolidation and increasing demand for local payment methods across Europe, Asia, Latam and Africa.
“With more pressure on how and when we use our money thanks to rising inflation, payment tech couldn’t be complacent. Given recent Ecommpay data shows us that 72 per cent of consumers are likely to abandon items at checkout if their preferred method of payment is not available, businesses needed options from their payment providers.
“And that’s what they delivered. One in five consumers have now used open banking as a payment method (19 per cent), 14 per cent of shoppers have increased their subscription payment use, and BNPL services are also experiencing increased use with 39 per cent of consumers using the credit option more. Merchants have been conscious of the wider payment process too, prioritising the optimisation of transactions and reducing fraud.
“For 2024, the outlook is positive as inflation rates have significantly decreased. We can expect APM growth for Africa and Europe, more consolidation of open banking providers, as well as in the orchestration space, and with new fraud regulations coming into effect, the security and safety of transactions will remain a priority next year.”
Giving more choice
Providing payment choice, convenience and customisation has never been more important to business buyers as we head into 2024, agrees Brandon Spear, CEO of B2B payments and invoicing network TreviPay.
“Merchants have an opportunity to gain a competitive advantage by perfecting the payments experience. Our recent research of 300 global business buyers highlights 72 per cent of business buyers are more loyal to a business that offers their preferred payment methods.
“Flexibility with payment options is so important that 78 per cent feel it is necessary for merchants to offer invoicing, and 51 per cent wouldn’t think twice about switching to a different merchant that offers flexible net terms.”