Digital transformation of payments has been one of the most significant developments in the past several decades. Digital payment processing has wholly disrupted the typical mode and manner of transactional settlements.
If you have ever tried to decode digitization, you must’ve concluded that it’s all about the effective interconnectedness of routine tasks in a digital fashion. Through further demystification, you would’ve understood that the connectedness of everything you do is the USP of a digital ecosystem.
This connectedness brings about easy access, time-saving convenience, cost benefits, and peace of mind by doing it all frictionlessly. These are some of the key reasons why digital transformation is taking root in every industry and all aspects of life. Payments are no exception to being the beneficiaries of the ongoing digital invasion.
Let us look at how far payments have come and the top trends driving the payments industry transformation in 2023 and beyond.
Shopping and bill payments are no more errands but highly immersive experiences. It is even a leisure activity for some, owing to the abundant variety of offerings right at your fingertips.
The scale of E-commerce coupled with trends such as embedded finance have been evolving to meet customer demands. There is no limit to what you can achieve from a single click, gesture on your wearables, or even a voice command to your virtual assistant.
Logistics have taken over the appeal of hyperlocal. This proposition is feasible owing to collaboration with delivery partners who have intelligent tracking mechanisms and warehousing facilities for fast and hassle-free deliveries.
Smart devices have been pivotal in achieving seamless connectivity for businesses as well as customers. AI technology is also being used for overcoming inventory management challenges and for initiating timely stock replenishments. Digital payments have become an integral part of these interconnected ecosystems.
With countries experiencing economic downturns, there are growing concerns that it would upend the already-strained global supply chains. There is a dire need to modernize cross-border payments to create agile and dynamic trade networks. The various halt points in the chain of supply of goods globally can all be fastened in an integrated system.
Digital payments play a pivotal role in ensuring global supply chains operate smoothly. We will see more businesses leveraging real-time networks to deliver cross-border payments across the globe within a matter of minutes.
Faster payment settlements have further heightened the expectations of people across the board. Be it payment for customer purchases, B2B invoice clearance, or payroll settlements, we see a growing appetite for instant access to funds. According to a PYMNTS survey, one-third of the surveyed customers are willing to pay to receive instant disbursements. As a result, Real-Time Payments (RTP) have boosted economic growth and improved overall market efficiencies significantly.
The recent unprecedented growth of Buy Now, Pay Later (BNPL) offerings has taken the global payments ecosystem by storm. Businesses that are enabling customers to pay for purchases in smaller installments over time have seen considerable growth in sales. While BNPL has been a hit in the B2C industry, businesses are also looking to take advantage of this solution by making big-ticket purchases without having to pay the full amount upfront.
Cross-border payments were complex and time-consuming due to elaborate SOPs. But P2P through blockchains has simplified that process, highlighting various new use cases of the technology. The transparency aspect makes it highly robust for business purposes, and the anonymity feature makes it ingenious.
Self-rendition in the digital world is not just a fad but possibly a way of life for many in the near future. Brands have been eyeing this opportunity to spread their wings in the virtual ecosystem and tap the hidden potential.
In-person concerts and shopping have become mediocre, and riveting augmented reality is the way to go for the newer generations. New payment methods will be developed to meet the growing needs of this virtual community. Blockchain-based digital currencies will be among the key augmented payment offerings that we see in the Metaverse.
The global luxury resale market value is projected to reach US$51.77 billion by 2026. In recent times, we have witnessed a boom in the sale of pre-owned luxury goods. Digital payments will continue to play a crucial role in the growth story of ReCommerce.
The MAANG organizations (Meta, Apple, Amazon, Netflix, and Google) are ruling the world of tech by having the most extensive customer base for their services and acquiring anyone who comes even close to posing a competition. The tech giants are setting the rules by leveraging frictionless payment mechanisms. These companies have the means to incubate innovation that is crucial for the entire industry. Businesses that want to stay in the game need to offer diverse, convenient payment methods.
One thing needs to be clearly understood: it’s not the market disruption that is causing the customer behavior to change, but vice versa. So, adapting to evolving customer preferences is the only way to stay ahead of the competition. A customer needs a vast choice to conveniently ‘pick from and pay invisibly’ in real-time, with extra perks such as security, privacy, and interest-free EMIs. On the other hand, businesses need such plug-and-play options from reliable partners to deploy them with ease. Technological advancement is a thin rope that needs to be tread with caution. Businesses can accelerate digital transformation by joining forces with payment technology providers with a legacy of working with robust, scalable, on-demand, and secure software. Choosing the right payment technology partner can make all the difference for a business in 2023 and beyond.
As we’ve been concluding in various articles throughout our blog series around digital payments transformation, payments across physical and cloud infrastructure need to be synchronized. Cloud-enabled digital transformation will help make the settlement process seamless across multiple mediums.
A strategy for future preparedness will allow merchants of all stature to integrate the latest payment techniques into their workflows seamlessly. This, in turn, will ensure customer retention and stable business growth.
We’re giving you a fresh dose of insights, perspectives and the latest trends from the world of payments.