Payments continue to evolve, creating new opportunities for merchant services providers.
The payments space has evolved rapidly in the past few years as consumer behaviors shifted toward the digital, forcing merchants to focus on providing competitive customer experiences to adapt. Change will continue into 2024, with these five payment trends at the forefront.
1. Contactless payments adoption continues.
Contactless payments have been growing worldwide, and they will gain wider acceptance in the year ahead. A recent Juniper Research report supports the market topping $10 trillion in just three years.
Some growth will come from expanded functionality of mobile wallets, for example, enabling identity verification as well as payments capabilities. As driver licenses and passports are digitized, as many as 75% more people will adopt mobile wallets for those purposes and begin to use contactless payments more often.
Additionally, more than half of Americans carry contactless credit cards, and as that number increases, more transactions will involve just waiving or tapping a card to make a payment.
2. Unattended payments opportunities increase.
The unattended payments market has turned in impressive growth, and analysts expect it to reach $100 billion by 2025. Sales partners will continue to find opportunities in vending, parking, mass transit, and self-service checkout.
However, electric vehicle (EV) charging may be the biggest driver next year and beyond. By 2030, 27 million Americans will be driving EVs. To meet the demand, both public and private entities are planning to increase the number of charging stations. While some schemes rely on apps to pay for charging, unattended payments give customers payment choices. They may also be easier in some cases, for example, when a consumer rents a vehicle. Payments integrated with the charging station eliminate the need to download an app. Instead the driver can use a payment card to pay for charging.
3. Biometric payments gain ground.
Biometric identity verification is now common in consumer electronics, demonstrating that customers are comfortable with the technology. Expect to see biometrics authenticating payments more often in the coming year. This technology is secure; it’s difficult to counterfeit a biometric scan. It’s also convenient. Consumers can make purchases even if they leave their wallets or smartphones at home.
The market outlook is strong, with firms like ABI Research predicting that biometric card issuance could reach 140 million in 2025, a dramatic increase from just 14,000 in 2021. While the market is growing more quickly in Europe and Asia, the long-term outlook for the U.S. market is positive according to a report from Goode Intelligence, predicting biometric payments to reach $5.76 trillion by 2026.
4. Social commerce represents a bigger fraction of sales.
Social commerce got a boost during the height of the COVID-19 pandemic when more people began purchasing directly from social media. Since then, consumers have made $1 trillion in purchases beginning on social media. Some analysts predict that number will almost triple to $2.9 trillion in the next two years.
Most Americans spend at least 2.5 hours every day scrolling through social media. Retailers can’t afford to ignore an audience that is large and captivated for that long. Sales partners can provide payment solutions, like hosted payments pages, that make it easy to take a consumer to a product page and pay so merchants can capture more sales.
5. Merchants get tougher on fraud.
There is no question that fraud represents huge losses for the retail industry. Tallying up the total cost can be difficult, with estimates ranging from $1,766 per retailer from the National Retail Security Survey to an estimate of $48 billion globally from MasterCard.
Expect merchants to fight back with more force in the coming year. Artificial intelligence (AI) solutions can analyze data — quickly enough not to diminish customer experiences at the checkout — and flag suspicious activity online or in-store.
Opportunities are everywhere.
Looking forward, sales partners will find ample opportunities to provide new solutions to meet consumer demands, enhance payment security, and help merchants build new revenue streams.
To learn more about the future of payments and how you can stay on the cutting edge, contact us to discuss a partnership with North American Bancard.
