Former fintech CEO Michael Zetser has extensive experience and expertise in the payment industry. This article will explore payment industry trends seen throughout 2022.
In order to reach new customers in 2021, many businesses made a significant shift, adopting omnichannel commerce strategies. In 2022, companies will need to invest in enhancing digital experiences to meet expectations at every part of the customer journey, starting with payments.
During the pandemic, largely driven by lockdowns and social distancing policies, consumers shifted online to work and shop in their droves. As a result, the general public is much more comfortable with navigating the world via a digital lens today. In fact, in 2022, more than half of consumers regard themselves as more digital than ever before, with 23% reporting that they shop online every day and 39% shopping via their smartphone every day.
According to Joel Henckel, Mastercard SVP in US Market Acceptance, there was a shift in how customers paid in March 2020. He explains that, for the first time ever, card-not-present transactions surpassed card-present transactions. As Henckel also points out, this shift has not reverted to pre-pandemic levels since.
In response to evolving consumer demands, many businesses are adapting and expanding their payment options, providing both flexible online payment choices and contactless instore options. In 2021, 38% of merchants reported that they had expanded their digital payment options. This shift is predicted to gain significant momentum in 2022, with 53% of merchants anticipating that they will accept more digital payments over the coming year.
Digital payment trends that have gained traction in 2022 include:
- Buy Now, Pay Later: Forecast to be worth somewhere in the region of $995 billion by 2026, Buy Now, Pay Later enables consumers to pay in digital instalments, often without incurring interest or additional fees.
- Digital Money: Fueled by rapid digitization of payments across Europe throughout the pandemic, interest in Central Bank Digital Currencies is steadily growing. In addition, competition from stablecoins like Tether and cryptocurrencies like Bitcoin has also remained strong in recent months.
- PINless Payments: Consumers are rapidly becoming the main authenticator for payments, with biometrics used to secure Apple Pay and other payment platforms tipping the scales away from traditional pin-authorized credit card payments. Experts anticipate that innovations like facial recognition and fingerprint technology will be integrated more and more in digital payment technology, removing friction from transactions and paving the way for customers to eventually pay for groceries or travel simply by walking through a terminal equipped with infrastructure linking their purchases to their wallet.
In conclusion, as we emerge from COVID-19 in a post-pandemic world, some habits created in 2020 and 2021 appear to be here to stay. In response, businesses must expand their digital offerings, ensuring that online experiences are seamless, convenient, efficient and personalized. As Visa SVP and Head of Acquiring Deirdre Cohen explains, businesses that deal directly with consumers must deliver experiences that consumers want. Otherwise, if they find it too difficult, they will simply go elsewhere. These experiences need to be enabled throughout the entire customer journey, from pre-purchase through to aftersales.
