Five Key Trends In Payment Cards For 2023
Economic and societal changes, plus technological innovation, are driving global uptake of payment cards and services.
The global digital payments market is now estimated to be worth more than the car manufacturing sector, and is expected to reach USD$20 trillion by 2026. According to virtual payment card provider Lanistar, this extraordinary growth of some 24 percent per year is being driven by a combination of technological innovation along with changing expectations and spending habits among consumers.
Jeremy Baber, CEO at Lanistar, said, “Today, we are seeing a surge in demand for prepaid or eBanking debit payment cards across the globe. This change is being driven by the unbanked and underserved, as well as by younger generations, who are making an active lifestyle choice to switch to this payment card type. We are also seeing a number of key trends in the market that providers need to be aware of. In our way, while the payment card market is established and substantial, there are still opportunities for expansion”.
1. The Rise Of New Generations Of Consumers
The Millennial and Gen Z demographic groups are now well established and have considerable spending power and economic impact. They are the two generations who are leading the charge on digital innovation, embracing digital and smart device payments and virtual cards. The combination of increased adoption alongside a wider choice of alternative payment cards is making financial services more accessible than ever before, ‘democratising’ the process through technological innovation.
Baber continued, “In today’s increasingly digital society, in which more people than ever before own a smartphone, consumers want and expect tailored financial products and services that can be accessed through a smart device. These services must be seamless and intuitive, while providing the services young people need. This is a generational expectation and failure to address it will have an adverse effect on any payment provider’s business.”
2. Reaching The Unbanked And Underserved
“Across the Global South, and even in many developed countries as well, there are high levels of unbanked and underserved consumers, mainly from younger and lower-income households,” explained Baber.
“Generally, these households opt for prepaid or eBanking debit payment cards because they are inexpensive and secure, which makes them best placed to meet their financial needs. But at the moment, this is an underdeveloped market,” he continued. “These payment cards have become integral to daily life for millions, and the people who use them are often open to exploring new features on their cards – at the right price point. The increase in adoption of cards among the unbanked and underserved populations will create multiple opportunities for players operating in the global payment market – but only if they offer the right services at an affordable price point.”
3. The Gig Economy Is Changing Payment Habits
“The advent of the gig economy shows no signs of slowing down. And while the flexibility of contract work clearly offers benefits for both workers and companies alike, one of the biggest trends we have seen is the role of payment cards in guaranteeing contract workers receive timely payment for their work. Whether it’s via a physical or virtual payment card or via a payment app, the gig economy is powering a payment revolution in its own right,” said Baber.
4. Apps And The Mobile-First Experience
Conservative estimates put the number of smartphones on the planet at seven billion, equating to ownership by roughly 86 percent of the world’s population. Providing an easy-to-use, seamless, and intuitive mobile-first experience is a priority, including in the payments space.
Baber continued: “Consider Amazon, for example. This is a company that is currently shipping 1.6 Million packages every day, and in part, that’s due to just how easy their mobile platform is to navigate and use. They stock just about any item a person could need, make all the crucial information clear as day, and rarely have any hidden charges. If this model could be imposed onto a banking platform, imagine the success it could have”.
5. Balancing Transactions In The Physical And Virtual
While it is likely we will not see the end of physical transactions anytime soon, as technology continues to grow and evolve, so do the capabilities of virtual transactions. There are many benefits to digital solutions, however, one that is particularly noteworthy is its reduction of plastic waste.
According to ABI Research, the amount of plastic used annually in the production of banking cards equals that of 80 Boeing 747 planes, with the carbon footprint of this production being equivalent to 300,000 passengers flying from New York to Sydney. As an age group deeply concerned with environmental issues, Gen Z and Millennials will often find themselves seeking out alternatives that negate environmental damage, and digital solutions are just one option.
Furthermore, effective payment solutions must balance speed, cost, and security with user experience. Customers today demand ‘anywhere service’, and payment providers must follow suit and ensure their services are available wherever customers are spending their time and their money. The rapid pace of technological advancement means the scope of ‘where’ continues to expand from physical to virtual.
Baber concluded, “The real success of payments will not come from them being the focal point of our daily lives, but instead from them slipping into the background and providing invisible, embedded payment experiences. The ultimate goal has to be that the user experience of payment cards and the apps they sit on becomes so deeply integrated with a person’s day-to-day transactions that eventually they are not even conscious of it. In other words, payment providers should focus on developing and bringing to market payment solutions that aren’t just frictionless, but invisible.”
Efficient Ways Construction Firms Can Bring Down Costs In 2023
Consistent, high-quality construction projects being underway is often a sign of a thriving economy. The future of the US is assured when new infrastructure and homes are under constant development.
As has been well-documented already, construction isn’t as productive as it could be in the US today. Numerous factors are causing these types of projects to be stalled and subsequent price hikes to occur. Economic and sector-wide conditions could be far better.
That said, it’s important for construction firms to feel like they have some say in their future. While things aren’t ideal, there’s plenty these entities can be doing that can bring down costs for the remainder of the year.
We’re a good way into 2023 now, but bringing down costs is not work that can be postponed to 2024. So, here are some efficient ways construction firms can do just that in 2023.
Review Fleet Logistics
It might seem like a curious place to start, but it’s a good idea to review how you utilize your fleet if you have one. The operational costs can sometimes be underestimated, and mismanagement in this area can be more costly today for firms in any sector.
Some companies bring their fleet management costs down by optimizing the routes they travel. Others will run tighter maintenance programs to avoid damaging repair costs in future. Some firms will rent out their vehicles, too, rather than purchasing them outright. Drivers may be subject to refresher training courses, ensuring they adhere to their employer’s money-saving policies.
Then there’s the matter of going green, which more companies are turning their attention to. For example, PepsiCo Vice President, Mike O’Connell, stated at the end of last year that, despite hefty costs around the infrastructural changes, his company believed that “the operating costs over time will pay back” to make the arrangement worthwhile in the long run. That sentiment applies to construction firms as well.
There’s also fleet management software to consider. These digital tools can be encrypted on a cloud server and give all users insights into things like fuel usage, the condition of the cars, and the routes travelled. More intricate oversights can be gleaned from fleet usage, and associated costs can be tallied up instantly. Consequently, construction firms would do well to get that installed.
Install Management Software for Construction
Sticking with software ideas for a while longer, construction management software can come with an onslaught of cost-saving advantages for a construction firm. It’s a principle similar to fleet management software in that more detailed real-time analytics can lead to strategy adjustments.
Cost change management can be streamlined with the use of these tools. Project team communication can also be simplified, which leads to time and money being saved all the more. There’s often a modern and intuitive AI to make these systems operational in days, too, which means construction firms can quickly adapt.
Firms like Kahua are often the obvious choice for these solutions. Their cloud-based project management software in construction has been fine-tuned to be tailored perfectly to a firm’s needs. A flexible approach can be undertaken when utilizing it, and firms can be confident that both their present and future business processes can be more carefully managed.
Create Stronger Supplier Links
Suppliers are the lifeblood of any construction business. It’s possible to work more closely with them.
At the end of 2022, Forbes reported that inflation and supply chain disruptions made getting the necessary construction materials more costly and time and consuming today. Their recommended solutions included rather expected budget control measures, but more notably, fostering stronger supplier relations. That way, construction firms can better understand the factors leading to surging material costs.
It may also be better for construction firms to work with local suppliers where possible. That way, they have a better chance of establishing common ground, supporting the local economy and perhaps having more mutual connections in the industry. Delivery costs can also be slashed along with emissions, which are factors that also contribute to a more robust working relationship.
Outsource Where Possible
Construction firms can depend on more than their suppliers to bring costs down. Further help is available.
Such support is usually accessed via outsourcing. Opportunities to do this may involve:
- Outsourcing waste management – some of these firms may pay closer attention to the potential of recycling and reusing materials, creating further cost savings.
- Outsourcing IT infrastructure – Construction firms have sensitive data they need to protect like any other company and are becoming more digitized like their peers too.
- Outsourcing to off-site construction firms – These entities will design and assemble building components away from the area they’ll be used. They’re often pitted against onsite firms, but both can be required for large-scale development projects.
Outsourcing can reduce costs in the long run, but it isn’t an answer to every struggle. Construction firms must continue doing many things for themselves – even monitoring the weather to ensure potential storms won’t cause hazardous work conditions or delays. That self-starter spirit that often drives construction firms should never be lost.
Top banking trends of 2023 and global outlook of banking and fintech for the year ahead
Author: Professor Marco Mongiello, Pro Vice-Chancellor, The University of Law Business School
You’d be forgiven for assuming that the global outlook for banking and fintech will be dominated by the usual suspects:
Artificial Intelligence – AI plays an increasingly prominent role in banking and fintech by enabling personalised services, fraud detection, predictive analytics, use of chatbots and robo-advisors.
Blockchain and Cryptocurrency – the secure, decentralised and swift system for financial transactions that blockchain has brought to the fore a few years ago, is now becoming ubiquitous. An increasing number of transactions are recorded through blockchains technology, primarily in the cryptocurrency market.
Digital Banking and fintech – accelerated by COVID-19 pandemic, the adoption of digital banking is a trend that will persist as customers have become accustomed to the convenience and efficiency of digital banking. Moreover, fintech enables access to financial services for previously underserved populations in developing countries or less affluent social groups in more affluent societies. This includes mobile banking services, peer-to-peer lending platforms, and microfinance solutions.
Open Banking – another global trend is the use of open APIs (Application Programming Interfaces) that allow third-party developers to build apps to facilitate customers’ access to financial data and services from banks.
Nonetheless, the challenges posed by these rapid changes are reminders that banking, an industry that by its very nature needs to be conservative, risk averse and solid, wobbles on the unchartered grounds of fast and turbulent innovation, where entrepreneurship instead thrives. The underlying rationales of banking and fast digital innovation are not incompatible but do need solid operations and thought-through decision-making to avoid causing catastrophic collapses.
The recent examples of Silicon Valley Bank, Silvergate, FTX and Wirecard are stark reminders that digital entrepreneurship applied to banking doesn’t just bring to customers the visible transformation of valuable new services, but also dents (perhaps as an unexpected consequence) the rationale itself of the role of banks in the global economy. Moreover, the central banks’ ability to contain the effects of single banks’ defaults is no longer a certainty, as experienced just over a decade ago and more recently. The markets’ sentiments are hardly reassured by the commitments of even the most coveted players, such as the European Central Bank, the Federal Reserve, and the President of the United States himself.
Regulators are lagging behind and their attempts to catch up may cause further seismic shocks to the global banking system. For example, another trend that is emerging is one of artificial intelligence decision-centres (i.e., decentralised offices of banks which take autonomous decisions on behalf of investors) outside the most stringent regulatory environments, enabling banks to operate globally more efficiently and more competitively. And we can expect that regulators will close the gap either abruptly, as it is currently happening in China, where private banks are subject to an escalation of regulatory and monitoring restrictions, or more gradually as it is happening in Europe and in the US.
The questions we face, as individual or trade customers of our high street banks, as direct investors or clients of managed funds, are whether banking will become more user-friendly yet, for our daily use but riskier, too, or is it simply becoming more efficient, transparent and also safer.
I’m afraid that the answer is by no means an obvious one. Therefore, caution, level-headed decision- making and critical thinking have never been as important as these days. Whether you are looking after your family savings or growing your pension reserve, the imperative is that you keep updated about the providers of the financial services you rely upon as well as about the general regulations that apply to your financial transactions. This is where, for example, you need to be familiar with your rights in case of cyber fraud, as well as learning how to minimise the risk of becoming a victim thereof. Also, taking additional steps to evaluate the credibility, solidity and reliability of the online provider of that app that was recommended by a trusted friend, may prove a very good move.
Similarly, whether you are the CFO of a medium or large company, or are a sole trader wrestling with your own business’s finances, you need to reflect on what you really want from your bank in the first place. That is before you started to be swayed by the whirlpool of offers of ‘opportunities’ to multiply your financial investments. Chances are that your initial approach to your bank was dictated by either a need for financing your working capital, as per your budget and strategic plans, or to find a safe place for your temporarily idle liquidity. Perhaps you were also after some basic treasury services such as swift payments and debt collection. Maybe some other financial services closely related to your business operations, e.g. factoring. The advice is to give very careful consideration to services that are more remote from your business, because the trend for the next years is that more and more of those will be offered to you. But many new services will disappoint those who, sadly, cannot afford financial mishaps as they look to run and grow their business.
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