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Trends That Will Shape Consumer Payments In 2024

February 5, 2024


Payment Trends for 2024

The payments industry is undergoing an explosive transformation. Discover how it will evolve in 2024 to ensure agile adaptation to change.

Users are rapidly growing accustomed to cashless real-time payments, and the industry is benefiting from enhanced financial inclusion and availability of data to drive innovation.

For traditional banks and financial services providers, acing the payments game can be transformational. Governments and global organizations are pushing digital payments adoption through guidelines and regulations. This is a huge opportunity to capture the market across the credit, lending, banking, WealthTech, financial planning, and insurance segments. While personalization, AI adoption, and cashless real-time transaction enablement were the key trends through 2023, here’s a look at the top trends shaping payments in 2024.

A Look Back at Payment Trends in 2023

Source: Discover Financial Services

Biometrics for Payment Authentication

This point-of-sales technology leverages the uniqueness of the physical characteristics of every individual to authorize transactions. As digital payments grow in leaps and bounds, fraud is bound to escalate. This anti-money laundering attempt is a part of two-factor authentication. It uses voice, fingerprints, retina scans, and face or palm recognition to validate that the payment is initiated by the rightful account owner. The mechanism also adds speed and efficiency to the transaction flow.

In an increasingly virtualized world with augmented and modified reality, decentralized digital IDs will form a critical part of all digital ecosystems. According to Mastercard’s President of Cyber and Intelligence Solutions, Ajay Bhalla, “As retailing environments continue to evolve and choices in ways to pay rapidly expand, biometric solutions offer a seamless, quick, and secure checkout, without needing to unlock a phone or insert a PIN.” The payments giant announced that it will incorporate face biometrics and liveness detection to improve user experiences worldwide in collaboration with NEC Corporation. Mastercard launched the facility in Brazil in November 2023.

The global biometric payments card market presents a potential opportunity of $5.8 billion, growing at a CAGR of 62.50% from 2022 to 2030.

Source: Straits Research

BNPL Becomes Ubiquitous

As consumers’ affinity to micro-lending grows, point-of-sale lending is set to grow in 2024. Buy-now-pay-later (BNPL) is popular among younger demographics comprising millennials and Gen-Z. Terry O’Neil, head of Connected Commerce and Strategic Growth at Citi Retail Services, highlights that pay-in-4 and pay-in-3 models are gaining popularity at the product design stage itself. In addition, weaving rewards and enabling personalization at checkout helps build customer loyalty and ensure longevity with the brand.

US consumers spent $16.6 billion in the 2023 Black Friday-Cyber Monday shopping season, which was a whopping 42.5% climb over the previous year.

Sources: Adobe Experience Cloud


         Payments Dive

“We are hearing from consumers again around expecting payment optionality online, and they are having those same expectations at the physical checkout,” O’Neil added. This may lead to the penetration of BNPL into physical payments as well. The ease and flexibility of processing payments via BNPL also attracts customers.

area emphasize that the trend is here to stay. The EU already has a Consumer Credit Directive that includes a BNPL directive, which is expected to be revised as the market grows. After its March 2023 report on BNPL, the US Consumer Financial Protection Bureau (CPFB) vowed to roll out regulations to prevent debt accumulation and overextension to protect both service providers and consumers.

Scan-less Checkouts

Scan-less checkouts may use one or more mechanisms, from smart shopping carts and RFID tags to machine vision and QR-codes, to automatically detect the items a shopper has picked or allow them to self-scan and pay before exiting a store. The technology aims to alleviate the pain of standing in long queues after loading up carts for in-store customers. It simplifies physical shopping experiences, saves time, and offers a self-service mechanism for customers to pay and exit the store, skipping the queues.

On average, adults spend about 32.89 days waiting in checkout queues.

Source: Grabango

While Uniqlo and Zara have been using RFID-based self-checkout counters since 2017, Tesco Fulham Reach Express, a UK-based retailer, was among the pioneers to introduce a “magic” checkout mechanism to facilitate automated invoice generation in 2023. It relies on the use of machine vision and smart shopping carts. The brand aims to deliver hassle-free shopping and payment experiences. The technology is cost-effective and helps prevent shoplifting at self-checkout outlets.

The global market for self-checkout systems is forecast to be valued at $13.98 billion growing at a CAGR of 16.2% from 2023 to 2030.

Source: Fortune Business Insights

According to Tesco’s Head of Store Customer Experience, Sarah Quiggin, the company is “constantly searching for the perfect formula to make the shopping trip as seamless and convenient as possible.”

While smart carts and machine vision use AI to observe user activities and prepare invoices in real-time, RFID and QR codes are scanned by shoppers through a mobile app to generate bills. Completing payments can be automated by scanning the user’s cards or Unique Account Identifiers to deduct payments. Complete elimination of item-scanning at a counter or by buyers themselves can be a game-changer for physical retail shopping experiences.

Central Bank Digital Currencies

Central banks worldwide are expected to accelerate the testing of Central Bank Digital Currencies (CBDCs) in 2024. CBDCs combine the advantages of digital transactions with the security of government support. More use cases will be experimented on for these cryptocurrencies across wholesale, retail and cross-border payments. Central banks are likely to also focus on the interoperability of CBDCs with other types of payments, including regulated stablecoins.

The rise of CBDCs will have far-reaching implications for the financial ecosystem as whole, including monetary policies. Juniper Research predicts growth of over 213,000% in global CBDC transactions by 2030.

Source: Cointelegraph

Seamless Payments Enablement is No More Optional

“Winning payments is our strategic imperative.”

JPMorgan Chase

This should be a priority for businesses of all sizes in the payments space.

The global digital payments market is forecasted to expand at a CAGR of 17.4% from 2023 to 2032 to reach a market value of $510.30 billion by the end of the period. As digital payments penetrate deeper into the fabric of retail value exchange, financial and non-financial organizations are realizing the importance of embedding seamless experiences in their broader product and service offerings.

The dominant trend across the financial landscape is cutting-edge technology adoption, automation, and leveraging it to offer innovative products, services, and experiences. FIs, including banks, credit unions, and payment enablers, must partner with experienced specialists to harness this massive opportunity. Opus Technologies has led diverse payment players to growth through its 27+ years of deep experience in the finance domain. Speak to the experts to optimize your growth and future-proof your payment operations.

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