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Payments Top Trends 2024

Non cash transactions volumes are expected to reach about 2.3 trillion by 2027, doubling since 2022, shows Capgemini’s report “Payments Top Trends for 2024”. This exponential growth is driven by the expansion of instant payment infrastructure in major markets, ongoing adoption of open banking framework, and more: evolving customer expectations, regulations, and industry initiatives are catalyzing the fast adoption of new instruments and instant payments.

• Real time treasury will be a great tool for efficient cash management an intelligent decision making.

• Efficiency will be bolstered by the adoption of instant payments.

• Use of AI and digitalization will improve client satisfaction and streamline back-end processes.

• Deglobalization will be a challenge for a global payment web tailored services.

• Instant payment methods and rails are changing the industry

• Innovation and regulatory changes are increasing payment provider costs

Real–time treasure empowers clients’ decision making and cash management capabilities

Integration programming interfaces (APIs) and connectivity are core enables for real time- treasury helping corporate clients reach faster decisions while optimizing cash management

Card alternatives- pay by bank and BNPL- are on the rise

Payment service innovation expands the options for shoppers and merchants, giving competition to incumbent card issuers.

Cloud-native composable platforms enable back-end reimagination

Financial institutions are adopting cloud-based APIs for a composable payment hub infrastructure to ensure adaptability within the evolving industry.

Digitalization will streamline accounts payables/receivables processes

AP and AR automation offer high- impact benefits to payments firms seeking better productivity and fewer errors.

Local and regional payments initiatives may challenge the dominance of card schemes and interconnected payments networks

Regional payments initiatives in silos can hinder the development of compatible cross-border global network that can streamline international trade.

Regulatory Initiatives spark payment innovation and robust security

Motivated by the move to cashless economies, regulators push for innovation that enhances customer experience and convenience. The draft PSD3 will merge the existing PSD2 with the Electronic Money Directive (EMD2) and provide rules for authorization and supervision of non-bank payment service providers in the EU. As some BigTechs blur traditional lines that have separated banking and payments from commercial activities. In late 2023, the US Consumer Financial Protection Bureau, in late 2023, proposed federal oversight of BigTechs that offer digital wallets and payments apps.

Instant payments offer a potential efficiency boost

Real-time payment networks operate 24/7 and provide numerous advantages, across flexibility, enhanced security, cost reduction and instantaneity. With an anticipated 2023-2033 CAGR of 12.2%, instant payments are on track to increase global market position, according to a 2022 study from Future Marketing Insights (FMI). Market value was estimated at USD 28 billion in 2023 and predicted to reach up to USD 125.7 billion by 2033. More than 79 countries across six continents had adopted real-time payment systems, representing 63% year on-year growth and 195 billion transactions in March 2023, according to an ACI Worldwide and Global Data report.

Central banks embrace CBDC to maximize financial inclusion

Central bank digital currency will complement existing payments systems, allowing increasing financial inclusion, program payments and reducing transaction’s costs.

Tokenization opens new frontiers for value creation

Payment provider are considering tokenization and blockchain-based decentralized finance systems to enhance transaction transparency, auditability and exploring various other use cases. Blockchain-based decentralized Finance (DeFi) uses open-source technology to eliminate costly payment processing fees by reducing intermediaries. The global blockchain market in banking and financial services is growing from 2022's USD 1.89 billion to USD 3.07 billion in 2023 showcasing YoY growth of over 62%. By 2027, it is projected to reach USD 19.27 billion according to a 2023 study by The Business Research Company in London.

Polling conducted for the World Payments Report 2023 revealed that 67% of corporations and 51% of payment firms are actively exploring tokenization for security and compliance. Juniper Research anticipates that between 2020 and 2025, global e-commerce fraud losses will increase by 18%. In 2021 alone, e-commerce businesses worldwide lost USD 20 billion to fraud. DeFi solutions like tokenization help make online payments secure and reliable.

AI upside for payment services includes productivity and client satisfaction

AI can help payment service providers boost customer personalization and grow revenue while reducing fraud and safety risks.