The Payments Glacier - The slow and steady move into 2024

The world payments landscape has always moved constantly but slowly. And while the speed of change is likely to remain measured, we’re about to witness unprecedented transformation in this industry, as global commerce is poised for massive innovation.

Payment businesses of every size and nature are seizing initiatives to remove friction from their processes and ensure they align with customer and industry expectations.

Our upcoming 2024 trends webinar promises to contain enlightening insights for anyone with a stake in the payments industry, from business professionals, financial institutions, merchants and providers to customers, users and beyond. Consider it your compass for navigating the intriguing currents that are about to shift the behemoth payments glacier in 2024.

Here's a brief overview of the trends we’ll be covering that we think will revolutionize the world of commerce and payments:

Payments globalization

Not so long ago, payments and finance were thought of as something local. International transactions were complicated and cumbersome. But globalization has put pressure on the infrastructure of the financial systems, catapulting us into a world of multiple currency options, payment systems, and competitive options available to transfer money around the world.

Here’s what’s re-shaping the global payments landscape:

1. ISO 20022 and standardization – Major financial institutions are adopting ISO 20022 to improve the efficiency and accuracy of cross-border payments. Throughout 2024 adoption will continue via real-time schemes and high value wire mandates. It will become the global standard for financial messaging, creating a unified framework for seamless financial communication.
2. Real-time payments are cornering the market – Consumer demand is driving real-time adoption around the world. In the US, real-time payments are usurping ACH, driving efficiency and significantly reducing transaction times. In APAC, real-time payments are growing rapidly, making payments more accessible and accelerating financial inclusion. Europeans were real-time payment pioneers, but have found that continuous innovation is crucial in an evolving market.
3. Cross-border payments – As globalization continues, 2024 will see businesses taking more of an international focus and targeting opportunities to grow and develop more revenue streams abroad. In fact a recent study by Juniper Research, reveals that cross-border eCommerce transactions will grow 107% over the next 5 years, to exceed $3.3 trillion in value.

Continued payment diversity

Consumers want choice. Payment diversity will be a key focus in 2024. This means faster, easier, more secure, and frictionless payment methods.

1. High payment diversification is growing, meaning more consumers are using multiple payment methods, with some using an average of 4.8 payment methods each month.
2. The rise of digital wallets globally is evident. 40% of millennials in the US and 84% of consumers in China use digital wallets for bills and payments, and this trend is expected to move rapidly to Europe.
3. The demand for Buy Now Pay Later (BNPL) is increasing. Rising merchant adoption and popularity with a broad consumer demographic will see BNPL payments account for almost a quarter of all global eCommerce transactions by 2026.

Increased use of AI and ML in payments

Artificial Intelligence (AI) and Machine Learning (ML) are set to have a significant impact the payments industry by enhancing security, personalizing the customer experience, and streamlining processes.

1. AI and ML can analyze huge amounts of transactional data, that enhances payment processes. This will serve to provide more accurate customer insights.
2. Machine Learning and AI began by analyzing and comparing historical against current behavior to predict future behavior. In 2024, the focus will be for AI and ML to complement historical analytics with enriched data to improve forecasting and better predict trends and patterns.
3. ML-driven detection can reduce false positives by 30% by helping create better data structure, intuitive screening, and semantic and statistical analysis.

Top priorities

1. Regulatory compliance is a big challenge and is becoming more complex. There can be significant penalties – financial, legal, and reputational – if payments aren’t processed accurately and on time.
2. Fraud and cybersecurity are expected to be a focus point, now more than ever, with the global cost of cybercrime projected to reach $10.5 trillion annually by 2025.
3. Customer experience will be a major focus in the wake of rapidly changing consumer expectations. Consumers are increasingly favoring more seamless and personalized interactions.

Observability

In the face of change, it’s more important than ever that financial organizations can stay on top of their environments.

There will be a key focus on real-time observability as a mechanism to break down silos across teams, optimize payment processes, improve proactive problem resolution, and ensure reliability.

In 2024, minor movements in the payments landscape will have profound changes on the way both organizations and their customers transact. This presents challenges, but also many opportunities for those well-placed to capture them.

Observability will be critical to maintaining consumer confidence, winning new business, harnessing innovation, and ensuring sustained success in the long term.

Join me and our team of experts at our webinar in January to get all the insights you need to get the right strategies to succeed in 2024 and beyond.