Innovations in the fintech industry and the developments following the COVID-19 pandemic had turned payments in a different direction. Big changes are taking place in the banking and payment processing sector. What will the next year look like in terms of everyday payments?
We have summarized the top 5 trends in payments for 2022 and beyond. Let’s see how will real-time and cross-border payments change, what is “Buy now, pay later”, what will happen with financial crimes, and how will the sector of payments change during and after the COVID era.
1. Real-time payments will be even more popular than before
Real-time payments are rapidly becoming the new habit in the world of electronic payments. These payments are used by merchants and clients all around the world, with 54 national live real-time payment systems. RTP are also a good provider of connection between the buyer and supplier, making the business process easier. Because of the COVID-19 pandemic, people need to make money transfers, which will arrive instantly to their receiver at any time of the day. The other big advantage is that no minimum balance is required and the limits are high.
2. The future of cross-border transactions is changing
A big acceleration of cross-border and cross-currency P2P and P2B payments is expected in the next year. Money transfers across the borders of your own country are usually expensive and complicated, as most cross-border payments take one to five working days.
Fortunately, in the last few years, significant progress has been made not only in P2P abroad payments but also in transfers from a client to a merchant. For example, cross-border transactions are made when the location of the company is in a different country from where the customer’s card was issued. This allows all shopping maniacs to order products from all around the world and pay for them with no additional price.
3. Consumers will use the “Buy now, pay later” option more often
“Buy now, pay later” (BNPL) is a growing trend in the field of payments, which is evolving very fast. This method allows customers to pay for their purchases in instalments. BNPL option is often interest-free, which differs from a traditional credit card which usually charges you interest for every month you carry a balance. According to research, around 1.5 billion consumers will spend 995 billion through BNPL by 2026. This trend will continue to evolve and will turn into “the new normal” among consumers.
4. Financial crimes will become more sophisticated
Unfortunately, the number of financial crimes is increasing since the COVID-19 pandemic started. Probably there will be no difference in 2022. According to a recent report, the average value of attempted fraudulent purchases has risen by almost 70% by the end of 2020. Digitalization makes payment frauds even more attractive to criminals powered by fears around the virus. Financial institutions have to monitor and report suspicious activity and invent newer and better technology to keep pace with fraudsters and money launderers.
5. What will change in payments after the COVID-19 era
The big question is whether trends in payments before the COVID-19 pandemic will return to their place when the crisis is over, or the change in customer attitudes to payments will be permanent. It’s no surprise that the number of contactless payments has been rapidly growing since March 2020. They have turned into a highly popular payment method among customers of retail shops. Contactless payments can be made by physical debit cards, mobile phones, smartwatches, and other accessories. These trends will continue in 2022, although some consumers may be willing to return to cash.
iCard is an innovative app, which provides you complete freedom in making payments. With iCard digital wallet, you can manage your finances in real time and make instant P2P and P2B transfers. The future of cross-border transactions is in your hands, literally.
Don’t worry about the increasing number of financial crimes. With iCard, you can make safe online purchases with 3D Secure 2.0. Be sure that no third parties can use the funds in your IBAN accounts. Use your phone to make mobile payments with Google Pay and Apple Pay or pay contactless with iCard Visa or NFC key fob.