As 2021 ends and a new year begins, we look back on the key payments trends that have emerged over the past 12 months to help you plan and prepare for the year ahead.
COVID continues to be one of the biggest disruptors and change accelerators of recent years. It caused more consumers and businesses to flock online – even digital laggards – and created an e-commerce boom in emerging and mature markets. As a result, we have seen dramatic shifts in payments as new behaviours and preferences come to the fore.
“It’s clear that offering the most advantageous payments mix will continue to separate the winners from those struggling to acquire customers and keep them loyal.”
Payments are no longer perceived as checkout housekeeping; it is now an active and key sales differentiator. It has become a vital tool in building trusted experiences, helping the unbanked access the digital domain, removing risk for new internet users, and bringing flexibility to furloughed and gig-workers. It’s even a way to pave faster uptake in overseas markets for cross-border brands.
Top 5 payment trend predictions
What does all this mean for 2022? Here are our top 5 payment trend predictions:
- Alternative payments will continue to challenge cards.
Although they still dominate online payments, traditional banks and credit cards lost some of their mojos as people and businesses sought more localized, personalized, and value-driven options. Among the most widely used alternative payment methods are mobile payments, bank transfers, prepaid cards, digital wallets, money orders, BNPL, and even cryptocurrencies. Defining the right mix for your customers will become a strategic priority in 2022.
- Mobile wallets’ share of the checkout will grow.
As global smartphone penetration rises to almost 80%, mobile wallets are expected to grow at a CAGR of 20%. With more consumers choosing to browse and buy on their phones, we can expect to see more mobile vouchers, digital loyalty schemes, digital charity boxes, and dynamic currency conversion to promote cashless payments via mobile wallets.
- Simpler solutions will be essential to cope with rising complexity.
Customers demand more choices, but many businesses struggle to integrate new payment methods with their legacy platforms. The key is having infrastructures like TrustPay, which keeps things simple by automatically connecting with multiple payment methods, from WeChatPay to Sofort, without incurring the unnecessary time and money integrating every payment method individually.
- Security will continue to be a major challenge.
Merchant losses from online payment fraud are predicted to exceed $206 billion from 2021 to 2025. There’s been a steep rise in synthetic fraud like ID theft, account takeovers, and bot attacks, as well as friendly fraud, especially from younger users. More advanced anti-fraud initiates and better management of chargebacks and false declines will be required to keep pace.
- Businesses will demand more value from transaction data
In 2021, data’s role was crucial in enabling businesses to accelerate their response to change. Retailers now want to support web analytics with more granular payment data to help personalize, target, predict demand, and optimise resources. In 2022, it’s likely that AI and ML empowered payments analytics will start driving more and more operational and customer-facing decisions.
It’s clear that offering the most advantageous payments mix will continue to separate the winners from those struggling to acquire customers and keep them loyal.
Closer collaboration with trusted payments partners
Whatever the future holds in store, closer collaboration with trusted payments partners will be a prerequisite for those looking to create stickier value propositions and more compelling sales experiences in 2022 and beyond.