Attributed to: Tim Annis, UK Managing Director at Bluechain
The payments industry has seen significant innovation in the past year, with new payment products and services transforming how people pay and get paid. We’ve noticed increased focus on blockchain, rising popularity (and potential regulation) in BNPL (Buy Now Pay Later) schemes and open banking is starting to make an impact. Advancements in PayTech have infiltrated all business sectors and changed the commercial landscape for consumers.
The cost of living crisis, economic turbulence and recession will continue to drive change into the new year. We will see more businesses get creative as they look for support and security during challenging times. Big tech will invest in financial services, and small businesses will adopt payment trends as they increase in popularity amongst consumers.
With more and more digital advancements affecting businesses every year, what can we expect to see in the coming year and will the same payment trends continue?
Customer experience will be the golden ticket – The financial pressures from the cost of living crisis have highlighted the importance of the customer experience to businesses. As inflation is at an all-time high, customers are looking for businesses that understand their economic hardships and offer flexible billing options that suit them and address their challenges. This highlights the importance of listening to what customers want and incorporating their feedback into the buying journey. Brand loyalty is at an all-time low, with people quick to jump ship from one brand to another if they feel that their customer experience or payment journey doesn’t meet their expectations. For this reason, we’ll see more businesses focusing on improving the customer experience due to the long-term importance of brand loyalty. And those that do, will thrive.
Mobile payments will take the lead– The number of smartphone users increases annually, and by 2024, mobile payments expect to hold 43% of the e-commerce market. The past year has seen a continued usage of mobile payments since the sector boomed during the COVID-19 pandemic. We predict a continued rise in the popularity of mobile wallets, QR codes, and tap-to-pay solutions in the coming year as the demand for seamless and convenient payments continues to grow.
AI for the competitive business advantage – AI can save businesses time and effort by automating processes and leveraging its vast learning capabilities with data. Customer data can help understand payment behaviour and intent to pay and create personalised collection activities suited to customers’ needs. Collating insights from multiple data streams within an organisation provides a more holistic view of customer needs, allowing for the creation of more accurate and personalised payment functions. This added visibility in a business that artificial intelligence brings will be an asset in the coming year.
Data will dominate customer engagement strategies – Businesses have become aware of the importance of digital payment options and associated data. This is because storing customer data provides valuable marketing and research insights for companies looking to understand customer wants and needs better. As we move into the new year, we expect to see an increasing number of data security specialists dealing with sensitive information. Customer expectations over the type of service have risen, meaning businesses will have to predict what customers need with greater accuracy.
Customers will demand more payment flexibility and control – Personalised payments have become a key differentiator amongst competitors in the tech sphere. Consumers want to feel valued and supported, especially during financial hardship. Flexible billing dates that align with payday for consumers nurture the relationship between the two parties as customer preferences are considered. From a business standpoint, aligning bills to their cash flow will decrease any added financial strains. People are always looking for greater control over their finances, even more so when money is tight. With demand for greater financial autonomy rising, we’ll expect to see a shift from rigid, outdated pay methods like direct debits, especially as cash pressures intensify during the cost of living crisis.
Leaders in innovation will be overtaken by laggards – Retailers have advanced payment technologies and top-tier customer experience journeys due to the nature of their industry being heavily customer focused. Retailers can see what customers engage with in real-time and on a larger scale due to the volume of customers they work with. These technology advancements are not retail-specific, and the execution mirrors that in other industries. Innovation in payment technology in one sector is expected to spill out into other sectors in 2023 because mostly these solutions are neither company nor industry-specific.
Pay tech will help businesses get ahead next year
Every year the PayTech sector becomes more advanced, with clever innovations that improve how the world navigates day-to-day spending. Some are trends, and others become an essential part of the payment process. In 2023, we expect to see more businesses react to the current economic recession and create cost-of-living-specific strategies to help people with their finances.
The need for flexible and seamless payment services will rise as more consumers consider it a must-have for their payment journey. Flexibility also provides businesses with additional benefits, such as greater transparency which creates visibility into cash flow and payment certainty.
We also expect to see the use of artificial intelligence to allow for more predictive marketing strategies as the need for customer-behaviour-led insights grows. Many businesses and consumers will find the prospect of the next year daunting. Although unpredictable, putting the right digital measures in place will help businesses prepare for the coming year and make consumers feel supported in 2023.
