Last Updated on February 18, 2024 by Ali Hamza
Over 80% of US consumers used one or other forms of digital payment in 2021. This is up from 78% in 2020 and 72% in 2015. Here are the 2023 trends for digital payments.
FinTech Innovation
FinTech companies invest their time and effort into finding new ways to take advantage of digital payments. Innovation is the name of the game. Follow this link to stay ahead of digital payment trends. This means looking at every point of contact with the customer and examining consumer preferences, then expanding the ways in which payments can be made.
Two Popular New Products
There are two products that more and more customers are opting for in 2022. The first of these is cryptocurrency. While 74% of consumers understand what cryptocurrency is, so far, only 20% hold these assets. However, this is a growing trend, and two-fifths of people surveyed were open to acquiring cryptocurrency with more understanding of how it works. Actual payments were made by 21% of respondents for international transactions and to anonymous sellers. Lack of confidence in the dollar and government was cited by 20% of participants as the reason for acquiring crypto.
Thirty percent of Americans have used Buy-Now-Pay-Later (BNPL) to pay for products. Almost a third of this number stated that without this option, they would not have purchased or spent less. Almost 40% selected BNPL over a credit card payment, and 31% used it instead of cash or a debit card. The most-purchased items utilizing BNPL are IT equipment, clothing, and beauty products.
Digital Wallets
Eleven percent of consumers do not take a physical wallet with them if the retailers they visit have an option for digital wallet payments or if they do not intend to make a purchase. However, 15% consistently rely on their digital wallet for shopping, thus only taking their mobile device on these outings.
Consumers who utilize a digital wallet noted, in 40% of cases, that they moved between cards depending on which ones had funds in them or to separate different types of purchases. Retailers have promoted digital wallets extensively, and most survey participants indicated that they had loaded most of their cards to their e-wallets.
Biometric Identification
As identity theft and fraud increase alarmingly, roughly 2.5 million Americans have opted for biometric cards in 2021. This trend is likely to continue in 2022. Biometric authentication is the most secure payment option to date as it uses individuals’ unique characteristics. These include vein mapping, heartbeat analysis, iris recognition, facial recognition, and fingerprints.
Mobile-point-of-sale (mPOS)
mPOS is a sales application that is used at the point of payment. A tablet or smartphone becomes the cash register. It only needs to operate an internet connection and the mPOS platform.
The advantage of mPOS is that it can be used at a restaurant table, farmer’s market, or consumer premises. For example, a pharmacy can deliver prescription medicine to a customer’s home and receive the payment immediately. It is anticipated that by 2023, a quarter of all payments will be made using this method.
Businesses and consumers seek safer, more efficient ways to pay for purchases. More trends will continue to emerge.
Tokenized Payments
Another emerging trend in digital payments is the use of tokenization. Tokenization involves replacing sensitive payment data, such as credit card numbers, with unique tokens that are meaningless and have no value outside the payment system. This provides an added layer of security by reducing the risk of data breaches and fraud. Tokenization also enables seamless integration between payment platforms and enhances the overall user experience. As more businesses and payment providers adopt tokenized payments in 2023, consumers can expect increased security and convenience when making digital transactions.
New Digital Payment Technologies to Watch Out for in 2023
As digital payment methods evolve, businesses and consumers seek more convenient, efficient, and secure ways to complete transactions. In 2023, we can expect to see some exciting new trends emerging in the digital payment space. Here are some of the technologies to watch out for.
Contactless Payment
Contactless payment has been gaining popularity since the onset of the pandemic, and this trend is set to continue in 2023. Contactless payment methods, such as NFC-enabled mobile wallets, QR code payments, and wearable payment devices, offer a touch-free payment experience that is both convenient and safe.
Voice Payments
Voice-activated payments are becoming increasingly popular among consumers who prefer a hands-free payment experience. In 2023, we can expect more businesses to integrate voice payment technology into their apps and websites, making it easier for customers to complete transactions using their voice.
Augmented Reality Payments
Retailers use augmented reality (AR) technology to create immersive shopping experiences. In 2023, we can expect to see AR technology being used to facilitate payments. For instance, customers may use their smartphones to scan a product and complete the purchase without leaving the AR environment.
Blockchain Payments
Blockchain technology is already being used for cryptocurrency transactions. Still, in 2023, we can also expect to see it being used for more traditional payment methods. Blockchain technology offers a secure, transparent, and decentralized payment system that eliminates the need for intermediaries such as banks.
Artificial Intelligence Payments
Artificial intelligence (AI) is being used in various industries. 2023 we expect more businesses to incorporate AI into their payment systems. AI can help businesses to detect fraud, identify patterns in customer behavior, and personalize the payment experience for each customer.
The digital payment space is constantly evolving, and in 2023, we can expect to see some exciting new trends emerging. From contactless and voice payments to blockchain payments and AI payments, businesses and consumers will have more options than ever to complete transactions quickly, safely, and efficiently.
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