Payment technology and innovation are accelerating across the fintech industry, with more companies recognising the importance of adapting to changing customer needs. The sector is projected to reach $1.5 trillion in annual revenue by 2030, comprising nearly 25% of all global banking valuations.
Undoubtedly, fintech and payments will continue to serve as pivotal forces shaping the financial landscape, but what trends will define the market next year? A team of Paymentology’s payment experts explore what we can expect to see in the payments industry next year.
Angy Watson, Co-CEO
"Companies in the payments industry will continue to leverage AI tools for the benefit of both their people and clients. This should bring opportunities for individuals to eliminate menial tasks and create space for more impactful activities, reintroducing human interaction to our work environment and client interactions.
Regarding solutions for clients, you can anticipate the integration of more AI tools in terms of data solutioning, fraud detection, and customer support.”
Abe Smith, Co-CEO
"Processors like us manage transactional risk for our clients. Historically, we have accomplished this through a combination of rules and assumptions. In 2024, the use of risk decision and AI will assist us in making better decisions and managing not just downside risk but also upside risk more effectively. This improvement should assist issuers in providing the right products to the right customers at the right price. If we achieve this successfully, it will contribute to driving financial inclusion worldwide, a cause that we at Paymentology deeply care about.”
James Letley, CTO
"In 2024, we will witness increased cloud adoption and optimization of payment solutions. With greater oversight and regulation of cloud providers, especially, we expect multi-cloud hosting to become a more widespread requirement to avoid concentration risk, as already observed in the UK under the PRA. Additionally, there may be more regulations addressing on-site requirements, but we might see some relaxation in certain developing regions."
Merusha Naidu, Global Head of Network Partnerships
“Customers are now helping to shape the way banks and fintechs create new customer-centric products and services. Some of the things we are going to see include more digitisation, increased biometric authentication, and the ability to embed a banking or fintech solution in the everyday lives of consumers. Seventy-five percent of consumers will change their payment product for something that speaks more to their personal needs. Loyalty, rewards, and embedded finance are all going to be key in shaping the trends of 2024."
David Oppenheim, Global Head of Ecosystem Partnerships
“The ongoing rationalisation of fintech funding will tame the spread of ‘Founderitis’, across the industry there will be less duplication of effort. Neo and traditional banks will look to buy-not-build, and engage with specialist technology vendors, resisting the temptation to build in-house.
Technology vendors will pull the plug non-core product expansion, be disciplined in the use of development resources, and partner-not-build to broaden their offering.”
Bulent Dal, Global Director of Strategic Accounts
“Various aspects of AI will impact on the payment value chain, and we are set to witness further advancements, particularly in fraud detection, upselling, and cross-selling, enhancing security and customer experience. Furthermore, AI will play a pivotal role in bolstering Buy Now, Pay Later (BNPL) services, offering more tailored and convenient options.”
Drisha Kirkman, Head of Programme Management and Sustainability
“Looking to 2024, the growing influence of Environmental, Social, and Governance (ESG) values will be fuelled by increased demands for transparency and social responsibility. Organisations across industries are establishing dedicated sustainability departments to align with evolving ESG principles. In the payments sector, digital technologies are forefront, eliminating the need for physical currency and plastic cards. Amid global chip shortages and environmental awareness, there's a notable shift toward greener financial services, led by startups and fintechs with innovative, socially conscious solutions. The rise of digital wallets and eco-friendly payment methods is inevitable, as consumers and businesses seek convenience, security, and environmental friendliness in the evolving payment landscape.”
Martin Heraghty, Regional Director for Europe
"The digital banking movement is alive and kicking in Europe. Next year, several leading banks will be launching new digital brands aimed at 18-40 year old mass affluent digital nomads, as younger individuals prefer younger banks. A similar trend will also exist in the SME area, with many innovative fintechs, including BaaS providers, targeting this space. This space primarily involves debit with FX capabilities."
Nauman Hassan, Regional Director for MENA
“Open banking initiatives will mature, leading to increased collaboration between traditional banks and fintech firms. As a result, the consumers will benefit from more personalised and innovative financial services. The Middle East is now shifting gears and gaining momentum in its adoption of open banking. While some countries are swiftly moving into the next phase of executing the frameworks, many others are catching up.”
Emre Durusut, Regional Director for APAC
“The expansion of tokenization technology is set to revolutionise various areas of the payment ecosystem. Beyond the conventional usage, we'll witness the proliferation of merchant tokenisation, while NFC wallets in Southeast Asia will gain traction, posing a challenge to the dominance of QR payments in the region. This shift will mark an evolution in the way payments are processed, enhancing security and efficiency.”
Kirsten Wortmann, Regional Director for Africa
“Partnerships are set to remain a driving force in Africa's digital payment landscape, addressing the continent's diverse payment trends influenced by local preferences and regulatory factors. As a result, collaboration among stakeholders is pivotal. Traditional banks are partnering with fintechs to remain competitive, while fintechs are collaborating with banks holding regulatory approvals and card scheme licenses. Many of Paymentology's clients in Africa are non-bank financial service providers who rely on partnerships with local banks for BIN sponsorship and assistance with central bank applications for launching card programs.”
Alejandro Del Rio, Regional Director for Latam
“The integration of wallets, platforms, and easy-to-use devices such as watches or wearables has improved both the convenience and security of transactions. A substantial increase in the adoption of these technologies for mobile payments is expected, especially at the point of sale, due to their ability to simplify business processes and developments. In addition, there is a marked interest in strengthening protection measures and expanding their applicability in everyday life, ranging from public transport to government services, beyond consumption.”
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