Prior to the pandemic, the world was becoming increasingly digitalized. Once COVID-19 hit payment innovation accelerated, resulting in a surge of new payment methods and the emergence of new payment trends that has continued to this day.
Buy Now, Pay Later
One of the key payment trends of 2022 is the provision of flexible, tailored, buy now, pay later plans for even small ticket items. According to Global Payments, 65% of merchants are planning to add buy now, pay later as a payment method in 2022.
Buy now, pay later transactions are expected to account for around 24% of global ecommerce transactions by 2026; in 2021 they made up just 9% of the total.
Embedded finance is the integration of financial solutions into the products and services of non-financial businesses. Payments experts – such as Michael Zetser, who has many years of experience in this sector – know that embedded finance makes for a seamless customer experience, making the payment or transactional experience almost invisible to customers.
Embedded finance solutions are expected to net brands in the UK approximately £230 billion over the next five years. Embedded lending is proving to be particularly successful in the UK (the UK was one of the earliest adopters of this lending solution). Embedded insurance is also popular in the UK, as well as in Germany and France.
Take a look at the embedded PDF for more information about embedded finance and its benefits.
The creation of connected digital commerce eco-systems is another current key payment trend. Keeping customers engaged throughout their lifecycle is an essential part of this, from initial awareness to long-term loyalty. Customer experience is enhanced by connecting commerce solutions like online appointments and check-ins, loyalty programs, automated communications, and marketing.
As well as helping businesses to attract more customers and grow their brand, commerce enablement also helps with identifying the best up-selling or cross-selling opportunities to drive up revenue.
Looking to the Future
In conclusion, digital payment trends will continue to develop and grow over the coming years, such as the use of biometrics and machine learning in fraud prevention, and the incorporation of virtual assistants and virtual cards.
Furthermore, new payment method innovations – likely largely driven by AI-enriched solutions – will inevitably be seen that, could holistically make the world a better place for customers, companies, and merchants.