What are the latest payment industry trends for 2022?
Payments nowadays are no longer defined by just their speed or ease – the crucial element post-pandemic is that they’re becoming more invisible and embedded, enabling a frictionless customer experience.
This is all being supported by a developing ecosystem that can be split into four broad areas: shared infrastructure, embedded finance, data, and platform capabilities. Each of these incorporate many of the wider trends in payments. Together, they form the future of payments.
Here are the B2C and B2B payment trends that are taking hold this year.
The basis of tomorrow’s payments architecture will revolve around firms opening to integration and offering shared services with other firms in their ecosystem. The core of this system will be supported by a services portfolio that will help enable tailor-made sector specific customer solutions.
These payments systems will not only offer native technology, but also integration modules, APIs and cloud-based distributed data. They can integrate a portfolio of services into a shared payment processing infrastructure, digital identity databases and other shareable registries. These services can speak to the core via API calls.
Digital ID infrastructure
Shared digital ID infrastructures will help unify access and pave the way for an open finance future. Digital ID solutions can also help control online fraud as online payment fraud is currently estimated to cost global businesses 1.8% of revenue each year.
As many as five billion people may use digital ID platforms for authentication by 2024 due to increased uptake of mobile payments. This is crucial for providing an optimal customer experience. After all, nearly 30% of customers experience check-out process friction during online and in-store transactions. This mobile payment trend is set to continue growing as we move forward.
Mobility-as-a-Service is an emerging type of service that, through a joint digital channel, enables users to plan, book, and pay for multiple types of mobility services.
The concept behind MaaS is to offer travelers mobility solutions that shift away from personally owned modes of transportation and towards mobility provided as a service as sustainable alternative. The Mobility-as-a-Service concept is expected to grow from a market size worth $74bn in 2021 to $230bn by 2025.
Frictionless and embedded payments, where the payment process is integrated seamlessly into the customer journey, are now expected by consumers as they seek simple, low-cost payment solutions.
Embedded payments are expected to go mainstream with the market size being estimated to reach USD 7 trillion by 2030, with the most explored sectors being food delivery, ridesharing and in-car payments.
The BNPL trend seems to have suddenly jumped onto the payment scene over the last few years. In retail, Buy Now Pay Later options will be further explored as inherent to embedded finance, driven by Gen Z and Millennials looking for convenience and low-interest options.
A Worldpay report stated that BNPL accounted for 2.1% of ecommerce transactions in 2020 and is expected to double by 2024. In addition, there are expectations that the BNPL platforms market will reach USD 33,638.3 million by 2027, expanding at a compound annual growth rate (CAGR) of 21.2%.
E-wallets remain a preferred payment method among global ecommerce consumers, registering 44.5% of global ecommerce transaction volume in 2020, an increase of 6.5% from 2019.
By 2024, digital wallets are projected to represent 51.7% of ecommerce payment volumes.mobile commerce, their seamless integration with social media and the rise of 5G.This trend is being sparked by their inherent suitability for
Account-to-Account (A2A) payments in Europe are expected to represent one fifth of all e-commerce payments by 2023. This is being driven by feasible alternatives to credit cards, the regulatory tailwinds of PSD2, and exciting new innovations in technology.
A2A payments happen by bank transfer, and are extremely beneficial for merchants as they eliminate ties to card monopolies and see fewer chargebacks. Integration into banking infrastructure means lower costs per transaction, with seamless customer experiences and secure authentication.
As Open Banking continues to mature across more markets, it is playing a key role in facilitating frictionless payments and enabling customers to move money internationally at speed and low-cost, removing the administrative burden of traditional bank transfers.
Greater insight into transaction data is also driving this trend:
Creating value from data is essential to survive. Currently, only 18% of surveyed banks consider data as an asset. These banks share data with third parties for value exchange and with that show maturity in following the open banking trend.
While 40% of the surveyed banks have been monetizing transaction-based APIs for a long time, other categories of APIs such as co-branding and white labeling are low at 10% and 25%, respectively.
Banking infrastructure generally falls short of the capabilities necessary to handle rising digital payment volumes performed on various instruments/methods, across geographies, time zones, and with always-on availability.
Platform-based business model
Implementing Platform-as-a-Service (PaaS) has benefits such as avoiding capital expenses, flexibility to add new functions, payment schemes, clearing access, and the ability to launch new products faster.
52% of surveyed banks intend to invest in third parties for product/offerings to develop innovative propositions and 45% plans to organize an API-based ecosystem and move to a platform-based business model.
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 Payments Trends Book 2022 | Capgemini
Maas Market Size Worldwide-2017-2025 | Statista
 The Year Ahead: Top Payments Trends To Watch Out For In 2022 | Finance Digest
World Payments Report 2021 | Capgemini