Could 2022 be our most exciting year yet?
Pay now, pay later, pay in installments, pay by mobile. Today, it’s never been quicker and simpler for consumers to spend money. The payments industry is being shaped by the demand for choice, value and flexibility. People have embraced, and now expect, payment methods that deliver great value, function instantly and make their lives easier.
Digital wallets have revolutionised the financial services industry by providing instant and convenient payment to consumers, enabling everyone, banked or unbanked to use these services. According to Juniper Research, there were 2.6 billion unique digital wallet users globally in 2020, which will increase to 4.4 billion by 2025. With consumer trends moving towards totally electronic wallets, the digitisation of payment methods is now part and parcel of keeping up with consumer demand.
According to a recent Omdia survey, traditional payments are increasingly less important for technology executives. Less than a quarter of respondents in Omdia’s survey selected traditional payments in their top three IT projects, while a third selected alternative payments as a top priority. Spending on technology in alternative payments is expected to outgrow traditional payments significantly over the next 18 months, as issuers and acquirers adapt to an unprecedented demand for digital payments.
Last year, Amazon announced that from 2022, they will no longer accept Visa credit cards in the UK due to the high fees Visa charges for processing credit card transactions. The inefficiency of paying by credit card also cannot be ignored when it comes down to customer experience. How often have you tried to buy something only for the card to not be accepted, whether through mistyping details or a fraud block? The risk of cart abandonment at the checkout is high and commercially impactful.
Open banking payments, such as A2A, carrier billing and payment schemes such as those run by Klarna all offer different ways to look at payments. Could 2022 be the year we see merchants fighting back, exploring more efficient ways for taking payments?
The appeal to pay by carrier billing is rooted in a consumer desire for convenience and frictionless experience; whether it’s buying a ticket, watching live sport or donating to their favourite charity, consumers want things immediately sorted.
We’re extremely excited to see the next phase of digital payments as alternative payment methods become the norm — watch this space!