Financial technology (fintech) is changing rapidly, which has brought a meaningful change in the landscape of payments and processing protocols. Now that 2024 is almost in the books, and the world saw a huge shift in the payment processing trends, primarily due to the pandemic that hit the world. To help cater to the customers’ needs, becoming familiar with the payment processing world’s upcoming trends is essential. This article is a comprehensive take on the subject of the newest payment processor technology advancements.
Keep reading to know more about the 10 top new payment processing trends in 2024.
10 Top Payment Processor Trends Of 2024
1. Cash Payments Are Slowly Phasing Out
Covid-19 has dramatically remodeled the world and affected payment processing too. The notion of Cash is King is slowly becoming weak in the digital age of Coronavirus. The unshakeable status of physical money is trembling due to the fear of spreading the virus. There is still no end date to the pandemic as the vaccine is only accessible to a limited fraction of the world population. This fact has made cash an unfavorable payment form in current times. People are now relying more on non-cash payments. The decline in cash payments is also majorly due to the change in consumer behavior during the pandemic. People prefer online shopping, contactless deliveries, and curbside pickups.
An interesting sign of the times is that there is a global change shortage due to customers not paying with coins or cash, and even throwing away low value coins! Brick and mortar shops are required to have change on hand but in recent years haven't been able to always maintain coin counts.
According to Statista, the number of non-cash transactions in 2024 will be the highest in the Asia Pacific region. The estimated figure is 325 billion. In the European region, it will be 250 billion, and North America will be 195 billion. However, a significant portion of the world population and 6% of Americans are under-banked. The advocates of cash declare cashless payments as discriminatory against them. Still, Fintech organizations are offering inclusive solutions that might overcome this problem more in 2024.
2. The Collaboration Of Fintechs And Traditional Banks
Banks hold a central position in the arsenal of payment choices, which has enabled them to build a massive customer base. They possess extensive information about the financial market and modern trends. Despite being a preferred option for payment processing, banks cannot meet contemporary customer demands. The needs of fast-paced market conditions are evolving too. These days, customers demand hyper-personalized solutions and high-speed transactions, which most traditional banks are still unable to deliver. This is primarily due to the lack of technological solutions or the absence of knowledge on integrating them into their operations.
Banks can leverage the robust tech understanding of fintech organizations. Their ability to create fast and convenient financial services can help banks more. Partnering with the right one will help traditional banks become better at digital services, functions, and features which the customer demands. Banks will no longer see Fintech Organizations as outsiders. Partnering with them to cut costs and revolutionize the banking industry will be the most rational approach for payments, empowering consumers to pay from anywhere, anytime. These partnerships will benefit both in multiple ways. For example, increase the consumer base, build the credibility of the organizations, cost reductions, and quick scalability of collaboration.
3. Frictionless Payments Are Favored
Long gone are the days when secure and fast payment processing wasn't a big deal. POS (point of sale) systems are everything these days for businesses. Efficient and seamless payments are a dominant determining factor momentarily. Customers will always prefer a business with frictionless payments if two firms are offering the same products and the other advantages are similar. Customers see frictionless payments as a vital part of customer service. Merchants must pay attention to this segment and map out plans to make buying from them a seamless experience to thrive in the current fiercely competitive environment.
This equally applies to in-store and online platforms, and any merchant with a streamlined approach to reduce the purchase time will have an edge. Business owners must expand their credit card acceptance and become compatible with diverse payment options like digital wallets, cash on delivery, installment options, and contactless payments in our current Covid-19 situation. Another great way to attract customers and drive traffic is to offer incentives like loyalty programs, gift cards, etc. If any barriers discourage customers from buying from you becomes less, it will give customers a comprehensive buying experience. But you still want to maintain payment portal security while reducing as much friction as possible.
4. Upselling At The Register With POS Systems
For those brick and mortar stores and restaurants that do survive the economic crisis and digital shift, your register or payment kiosk needs to count. That is why POS (point of sale) systems at the register have been updated to not only accept new forms of digital or frictionless payment and EMV chip credit cards, but to add upselling value like calls-to-action and rewards programs. A POS system and all the benefits that come with it for merchants and customers is a top payment processing trend going forward.
5. The World Adopts Real-Time Payments
Millennial and Gen-Z preferred everything happening in real-time and instant payments for sure. Worldwide merchants are increasingly drawn towards real-time payments (RTP). RTP is becoming a trend due to amplified convenience, and it enables customers and merchants to send and receive payments in the blink of an eye. More than 2.7 billion people worldwide are smartphone users, and the prevalence of RTP is also due to this apparent accessibility of smartphones, P2P application, digital currencies, etc.
The benefits of using RTP are widespread, including comfort and security. With RTP, customers receive instant fund transfer confirmation messages, invoices, current account statements, and so much more. RTP promotes security and transparency in payments and is very suitable for merchants as well as customers. RTP is power-packed with smart features for finance management, payment of bills, and P2P payments. Merchants' desire to become better than competitors by offering enhanced facilities will also be a core reason for RTP trending in 2024.
6. Mobile Payments Gets Real
The global health crisis boosted the popularity of cashless payments, and there will be a hike in the adoption of mobile payment methods in 2024. Such payments are incredibly beneficial for businesses that are in search of recurring customers. Mobile payments started when the tech giant Apple released its first digital wallet service with Apple Pay, and later every big company followed the way. Samsung Pay, Google Pay came into existence later, and in a couple of years later, 37% of US consumers were using these online payment systems. By 2025, over half of the world's population will be using mobile wallets, according to the report by Juniper Research.
7. EBT, SNAP, & FNS Payments Accepted In More Places With Different Payment Methods
If you live in the U.S. then you are probably aware of the payment programs that are set in place to protect the impoverished. During the Coronavirus pandemic and economic recession, the number of citizens receiving these emergency benefits have increased due to the downward spiral job market. The protection from the federal and state government ensure that food and nutrition is provided to everyone and paid with a card, smartphone, mobile code, PIN numbers, or other payment methods.
There are various payment programs that are set up by the concerned state governments and the federal government in the USA. There are qualifying criteria for each program and people should fulfill to be able to avail the same. Here we look at the definitions of EBT, SNAP, and FNS and how they differ from one another. We also look at the aspects that you would need to qualify for these programs and avail the benefits that they have to offer to users and merchants receiving these payments.
EBT Payments
The EBT is also known otherwise as the electronic benefit transfer system. It was introduced almost two decades ago and has been in use ever since. You can get to use your benefits with the help of a card that is similar to an ATM card or a debit card. It allows for a person holding it to avail both cash and food benefits. People can use any of the participating ATMs to withdraw cash or use it at stores that accept EBT to purchase food and beverage. However, beverage is restricted to non-alcoholic items only. This card works in association with SNAP and also provides refugee benefits along with TANF or temporary assistance for needy families. Your eligibility is determined after you fill up a form over the internet or locally at the food stamp office.
SNAP Payments
SNAP is abbreviated as supplement nutrition assistance program in the US. It was earlier known as the food stamp program and the same term is still in use in the country. People with no or low income can qualify for this federal program. This program is designed to ensure that no one goes hungry in the country. Although these benefits are temporary, one has to apply to avail it. You can only qualify for a 3-month period in a span of 3 years for this benefit. You can apply at the local SNAP office for this. Similar to EBT, you have to find a store that is enrolled in SNAP.
FNS Payments
Food and nutrition service is what FNS stands for in the United States. This payment program is targeted at providing the essential nutrition to the people below the poverty line. Grants usually funds this program and it is closely associated with the US Department of Agriculture to help poor people make payments with less friction.
All of these payments will need to be accepted at a larger number of locations, including online stores now.
8. AI, NFC & EMV Paves Their Way
Financial service providers invested a lot in AI technologies in 2024, and this inclination will continue in 2025. Artificial Intelligence and machine learning technologies can significantly improve payment processes. These intelligent technologies come in handy in fraud detection, enhanced, and cost-effective customer service. Streamlining data management and assisting in the digital shift are other additional benefits of AI.
On the other hand, Near Field Communication (NFC) technology embedded in mobile devices is becoming a popular payment method in this digital world. This is due to the more convenience and security it offers. NFC and EMV (EuroPay, Mastercard, and Visa) both work by tap or wave contactless format for making payments. There is a lot of similarity between them both. EMV is especially for contactless credit card payments and is deemed cheaper than the traditional swipe method.
9. Increased Payment Security Priority
With greater financial technology and powerful payment processing comes greater responsibility. The more payment processing methods and technologies are involved, the greater opportunity for identity theft and hackers. Fintech payment security will continue to be a top priority as more digital money is at stake than ever before to be hacked. Hackers are always looking to exploit weakness in payment processing systems and websites storing payment information.
10. More Cryptocurrency Payments Accepted In More Places
Bitcoin used to be the only cryptocurrency accepted as payment anywhere, and the few and far between websites that accepted it as payment were a bit sketchy. Aside from deep dark websites doing illegal deals, the only sites that accepted it at first were a couple of spammy dating sites and maybe Etsy. Now countless websites and mainstream businesses are accepting Bitcoin and a dozen other popular cryptocurrencies, even Dogecoin which was essentially created as a joke! One of the most valuable companies in the world Tesla just bought billions of dollars in Bitcoin and will accept Bitcoin as a payment for their cars in 2024! Major companies like PayPal and Mastercard are now utilizing cryptocurrency payments as well.
The trend of increased BTC, DOGE, Ethereum, and other cryptocurrencies being accepted by online and brick and mortar stores will continue to gain steam.
Payment Processing Power
The world of payments is changing rapidly now by the day. Soon you will be able to pay with cryptocurrency everywhere or with a chip implanted into your body. Only time will tell, so follow the latest fintech and payment processing trends of 2024 and beyond right here on Bootstrap Business.
