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Are you tapping into the latest payment technology trends? If not, you could be left behind in today’s competitive marketplace. American consumers are embracing digital payment methods from peer-to-peer apps to mobile wallets like never before. Here are four digital payment technologies to keep an eye on this year, providing the potential for more efficient and diversified operations.
1. Universal acceptance of BNPL
Once the preserve of Gen Z and Millennial shoppers, buy now, pay later (BNPL) is a payment trend cutting across all demographics. If your business isn’t offering BNPL as a checkout option in 2023, it might be time to consider it. According to analysis from Juniper Research, over 900 million consumers are expected to use BNPL by 2027. This is up from just 360 million in 2022. One of the big perks for businesses is that BNPL allows shoppers to purchase big-ticket items they wouldn’t otherwise afford. Services like Klarna and Afterpay break down the purchase into a series of short, interest-free installments. It’s an easy way to expand your reach, by offering a popular new payment method.
2. More convenient biometric payment technology
Biometric payment technology is another trend that’s not entirely new, but expected to reach new heights this year. Today’s shoppers are more concerned than ever about online payment fraud, and built-in biometric checks provide a simple payment solution to this issue. What do we mean by biometric payment technology? This category includes everything from facial recognition on your banking app to fingerprint scans at checkout. Businesses can build these into their payment technology strategy to build trust and prevent fraud.
3. New uses for blockchain payment technology
Whether or not you follow cryptocurrency markets, blockchain payment technology is worth giving a second look. Also known as distributed ledger technology, it’s being used in new, innovative ways to enable instant payments across borders. One example is Kenya-based BitPesa, which uses the blockchain to allow its customers to send and receive funds without a bank account. Transactions are verified securely and in real time, preventing fraud and allowing for faster settlement.
Along these same lines, major crypto providers are entering partnerships with more networks and payment processors. Major names like PayPal and Amazon Payments now include cryptocurrencies as payment methods via the blockchain – we can expect these partnerships to increase. In fact, research suggests that the global crypto market will expand at a compound annual growth rate of 12.5% between 2023 and 2030.
4. The rise of intelligent payment technology
Artificial intelligence and machine learning are growing at an exponential rate across many sectors, and payments technology is no exception. Biometrics aren’t the only way to provide an extra layer of security. Tools like GoCardless Protect+ use machine learning-backed payments intelligence to provide heightened security to your customers. This anti-fraud solution was developed for bank payments, designed to automatically identify, prevent, and monitor any sign of fraud. Using big data, the system monitors common fraud patterns, verifies risky payers and can even challenge chargebacks.
The Success+ tool from GoCardless works in a similar fashion, using payments intelligence to reduce payment failure. When a payment fails the first time, it’s automatically retried at the most optimal date to boost the chances of success. With the power of machine learning, 70% of payments are recovered that fail the first time around.
The bottom line
As we move increasingly toward a cashless society, we can expect to see an expansion of digital payment technologies like those mentioned above. If you’re not already embracing the wealth of high-tech tools out there, you could risk falling behind the competition. Keep your eye on consumer payment preferences to deliver a better customer experience, forging a path to year-end growth.
We can help
GoCardless is a global payments solution that helps you automate payment collection, cutting down on the amount of financial admin your team needs to deal with. Find out how GoCardless can help you with one-off or recurring payments.