This month The Fintech Times is exploring paytech, meaning any technological innovation that changes the way we pay. As innovation continues throughout the space, we ask what the biggest payment trends of 2024 could be.
Paytech continues to see innovations and appears to be ever-evolving at a rapid pace. Often, payments are moving and changing so fast, it can be difficult to keep up.
Having explored the opportunities and innovations in payments, we now turn our attention to the future. How will payments evolve in 2024 and what trends are set to take over? Once again, we reach out to the experts to hear their take.
Creating value for consumers
Ramez Hanafi, head of digital solutions at Visa, explains what trends he expects to take precedence next year: “We can expect to see a continued emphasis on creating value for consumers, with payments driven by choice, experience, and the availability of data.
“Contextualisation of payments will be key – the more context a provider can learn (and the more you trust them with the data that enables them to gather context), the better a service can become.
“With context, it becomes possible to understand and anticipate needs – and proactively offer timely, enriched, situation-aware products, services and advice. Open data economies can enable the integration between different sectors and magnify the benefits.
“Recognising this interconnectivity can unlock real value. For example, Visa’s partnerships with Tink, the market leader in open banking, and ecolytiq, the Sustainability-as-a-Service solution provider, combine their respective money management and climate education tools. This scalable, plug-and-play toolkit enables banks to give their customers a holistic understanding of how what they buy impacts the planet, and how to adopt more environmentally conscious behaviours.
“The exponential growth of data, and how it can be used to power AI, is at the heart of the next payments evolution. AI will remain a key topic in 2024 and we believe that it can be a force for good in financial services – improving the financial lives of individuals and businesses, promoting security, financial inclusion, and financial well-being.”
Steve Naudé, head of Wise Platform, also made his predictions of the 2024 payment trends: “We expect we’ll see more transparency.
“Customers prefer honesty, especially at a time when the economic environment is turbulent and will keep searching for options they can trust. These are companies and platforms that are upfront about their services, operations, and fees as a standard.
“When making cross-border payments, people want to know what is happening to their money throughout the whole transaction, accurately – where it is, when it will arrive, how much will arrive and, most importantly, how much it will cost them to make the payment.
“This transparency benefits providers too – with lower operational costs from fewer customer contacts, and increased revenue by driving higher adoption of the service.
“For that reason, we’re seeing more firms look at how they can make it easy and convenient for their customers to have a clear, upfront overview of the process as well as focus on how they can eliminate complex processes and hidden fees to retain customers from switching to fully transparent alternatives.
“For example, Bank Mandiri has become the first transparent international payments bank in Indonesia by partnering with Wise Platform. They realised the need for change early and are now able to provide their customers with low-cost rates and quick, efficient international payments. Therefore, we will likely see more banks and financial institutions starting to embrace transparency and integrate fintech solutions that help them on the journey to becoming more upfront with customers.”
Integrating financial products into everyday transactions
Irene Skrynova, chief customer officer at global fintech Unlimit, also revealed her expectations for the payment trends of 2024: “Looking ahead to 2024, one of the major payment trends will be the convergence of financial services and seamless customer experiences.
“This trend will involve further integration of financial products into everyday transactions. For instance, we can expect to see financial institutions and fintechs offering value-added services at the point of sale. This could include instant financing options, personalised financial advice, and loyalty rewards tied to payments.
“The objective is to create a holistic and user-centric financial ecosystem that simplifies financial decision-making and enhances customer satisfaction. Such innovations will not only drive customer loyalty but also boost overall financial inclusion and engagement in the digital economy.”
Tomas Navickas, CTO and co-founder of myTU, explains that he also believes that AI will continue to dominate across sectors: “The proliferation of AI across various sectors hints at its imminent dominance in the realm of payments as well.
“While the apparent applications of AI, like personalised assistants or enhanced financial education, are predictable, delving deeper, we see the potential for AI to revolutionise user authentication.
“Instead of relying on traditional knowledge-based verification methods, future payment tools might evaluate a user’s unique behavioural characteristics, such as their gait, speech patterns, or even reactions to stimuli. This could lead to what we might term a ‘seamless identity’.
“Additionally, the future could see AI autonomously conducting transactions on our behalf. The integration of AI in payment systems prompts us to question its architecture – will AI assistants become a mere feature of larger payment platforms or vice versa? The evolution of payment trends seems poised to blur the lines between individual technologies, offering users an integrated, seamless experience.”
Brian Gaynor, is the vice president of product and European chief executive of global payment orchestration platform BlueSnap. He predicts that payment orchestration will be the biggest payment trend in 2024: “Traditionally, payment orchestration was simply middleware software businesses use as a tool to help manage multiple payment services, none of which are fully controlled by that software.
“These legacy payment orchestraters neither move money nor determine how payments are routed. The business still works with multiple gateways but uses the middleware to control them.
“But the new optimised, modern payment orchestration you will see gain popularity in 2024 allows businesses to consolidate to one vendor that includes payment orchestration and payment processing without sacrificing payment optimisation. The logic and payment capabilities are fully controlled by a single platform that actually moves the money, helping to reduce operational and technical debt while increasing authorisation rates and reducing costs.
“Given that the average business uses two to three payment providers, this presents a real opportunity for them to scale back on the technical debt of working with multiple vendors without sacrificing results.
“Large-scale merchants want to reap the benefits of working with multiple payment providers – flexibility, cost optimisation, improved authorisation rates and access to multiple geographic locations – but to get this, they now just need to partner with a global payment orchestration platform.”