An efficient and fast transaction process is essential to facilitate trade in and across geographical borders. As digital transactions replace fiat currency, the payment industry is continually inventing new ways to improve and automate financial services and operations that benefit business owners and consumers. The payment industry employs different solutions ranging from payment applications to cryptocurrency to advanced transactions, and these are some of the top payment trends of 2024.
An Overview of the Payment Industry
The global digital market is projected to reach $16.6 trillion by 2028, according to reports, further verifying the need for a payment solution to ensure convenient, fast, and secure transactions. This market consists primarily of consumer transactions for the payment of products and services via different payment solutions, which can include digital wallets, vPoS, and more. The use of these platforms guarantees enhanced customer experience as payment across geographical borders is fast and seamless. Positive payment channels, in return, encourage more purchases.
Top Trends in the Payment Industry This 2024
The following are some of the common trends in the payment industry this year:
Blockchain and Tokenization Technology
Cryptocurrency has been long associated with the term ‘Blockchain and Tokenization’, but the payment industry has employed these solutions to revolutionize their existing products. The blockchain serves as an innovative tool to radicalize the traditional financial sector, eliminating drawbacks affecting liquidity, scalability, and accessibility. Tokenization and the use of smart contracts to self-execute certain processes have proven effective in enhancing security in various financial tech domains.
For instance, 45% of Visa card users confessed to having forgotten their credit card information, and this has affected payment on certain occasions. With the use of tokenization technology, credit card information is securely stored and even updated upon expiration, allowing for an easy online shopping experience. Business owners interested in incorporating blockchain and tokenization into their pre-existing solutions may require white-label omnichannel services like PTPShopy which offer pre-made solutions that can be customized to suit your business needs and aesthetics.
Buy Now, Pay Later (BNPL)
The Buy Now, Pay Later platform, or delayed payment channel, is a popular trend that is widely adopted in the e-commerce industry, particularly. This solution is a preferred choice for many online shoppers for obvious reasons. Around 26 million online shoppers, which is more than 50% of UK adults, have confessed to using BNPL channels at some point during shopping, according to a 2024 survey, which is a drastic increase from last year’s 19.1 million.
There are over 82 million BNPL online shoppers in the US, and this population is also expected to increase to 100 million in 2025. Online shoppers outside the UK and US are also BNPL users, as over 360 million people used BNPL solutions at some point in 2022. This dependence on BNPL is predicted to run for a while, as recent Juniper Research showed that more than 900 million shoppers will use BNPL due to accessible and affordable credit options in the future.
Businesses interested in incorporating BNPL as a payment option must have a reliable payment processor to handle this unique kind of transaction to ensure ease and flexibility. For consumers, payment is usually interest-free and can be spread across months, allowing them to purchase more items in bulk and increasing their trust in your brand. For instance, GymShark experienced a 33% increase in sales upon adding the BPNL feature, proving its effectiveness. However, businesses need to factor in additional charges from the BNPL providers, which can be as high as 8%, if they are looking to make any profit.
P2P Payment
The peer-to-peer payment method is another solution developed to eliminate the action of intermediates or third parties during transactions. This solution occurs on online platforms and matches either potential borrowers (P2P lending) and lenders or potential buyers and sellers (P2P payment). The process of P2P payment or transaction occurs on secured online platforms or applications like PayPal that match users based on their unique system of identification, usually bank account details or usernames.
AI Influence in FinTech
The influence of artificial intelligence stretches far and wide and ranges from gadgets to education and now to improving payment systems. The release of ChatGPT in November 2022 served as a turning point for both public and private payment solutions. Traditional banks are also employing AI to automate complex processes like credit scoring and risk assessment, offering an avenue to allow customers to personalize their experience.
Many banks are now using AI to analyze large amounts of data and perform technical analysis of assets to provide their customers with a refined financial product that solves all their needs. Chatbots run with generative AI and process requests and complaints faster, which improves customer satisfaction and retention.
Mobile and digital wallets
Digital or mobile wallets are the bedrock of online shopping and have outrightly replaced physical wallets. With over 2.8 billion digital and mobile wallets recorded across the globe this year and total transactions recorded exceeding $9 billion, as reported by Juniper Research, digital wallets will continually top the list of trends in the payment industry. One benefit of a digital wallet is its speed and security, which allow consumers to make payments in less than 5 taps. Many of these wallets have built-in payment features like QR codes that make payment easy. Plus, there are additional loyalty programs that keep the customer engaged and improve retention.
Customers can choose to use their mobile wallets attached to their bank accounts or their cryptocurrency digital wallets to make payments. Over 60% of consumers loved using cryptocurrency for purchases, and over 25% would switch to brands that offered cryptocurrency payment checkouts. Hence, offering versatile fiat and cryptocurrency payment solutions as a business owner is guaranteed to improve sales.
Get More Sales and Improve Customer Checkout
70% of online shoppers abandon their carts for the whole shopping, which means only 3 out of 10 customers make it to the checkouts, according to research by the Baymard Institute. Adult online shoppers between the ages of 25 and 34 tend to abandon their carts more than other age demographics, as stated by ContentSquare. One of the major reasons for abandonment is fear of credit card information theft and a restrictive payment option.
Credit cards and PayPal are two of the most popular payment methods among customers today. However, some customers may prefer privacy, lower fees, and transparency when conducting online transactions. That is where cryptocurrency comes in. Crypto offers these benefits while ensuring security of funds and personal information.
Increase your customer base with cryptocurrency
Many businesses that accept payments online now use cryptocurrency as a payment method. As digital currencies such as Bitcoin, Ethereum, and others gain traction, businesses have a unique opportunity to reach a growing customer base that values privacy, security, and efficiency. Integrating a cryptocurrency payment gateway such as PTPShopy can be a game changer for businesses looking to stay ahead of the competition.
PTPShopy enables businesses to accept cryptocurrencies as payment, providing customers with a flexible and secure method of completing transactions. By offering this option, you not only meet the needs of tech-savvy customers, but also reduce transaction fees and eliminate the risk of chargebacks, which are common with traditional payment methods.
Furthermore, accepting cryptocurrency can attract international customers who may encounter difficulties with traditional payment systems, such as high conversion rates or limited availability in their area. With PTPShopy, you can easily integrate cryptocurrency payments into your existing checkout process, making it more convenient for your customers and your business operations.
PTPShopy supports over 400 cryptocurrencies, with transaction charges that are less than 1%. It comes with a white-label crypto gateway, PoS system, crypto freelance payments solution, and donations functionality to ensure high quality payments acceptance by businesses. Using PTPShopy, you can improve your customers’ checkout experience, increase sales, and build trust with a larger customer base.