4 Digital Payments Trends Making Businesses Future Ready in 2023
This year, we’re looking at a different world in digital payments. Businesses are facing down recession fears and tighter margins. Consumer spending habits are shifting as they contend with inflation.
What hasn’t changed? The payments experience is still key to maintaining healthy cashflow and loyal customers. And innovation will still pay off down the road in cost-reducing efficiency and better customer experience (CX). It’s just that businesses must adjust their priorities to navigate 2023’s economic headwinds.
CSG Forte President Jeff Kump, and Sukanya Madhavan, VP of Product Management, offer a glimpse of where merchants will make strides in the payment experience, from digital wallets to ACH to security.
Here’s what they see organizations doing to prepare not just for 2023, but for the years ahead in digital payments.
1) Digital Payments Will Help Make Businesses Metaverse-Ready
Cash is phasing out as consumers embrace more digital avenues of retail shopping, like buy online, pick up in store (BOPIS). Even as the pandemic waned, U.S. coin shortages persisted because consumers weren’t inclined to use them to buy things (which stalled circulation).
Trending up are digital wallets, which have become more commonly used than even credit cards, according to a global survey. It’s not just because of consumer preferences—businesses are encouraging digital payment options, too. They’re already trying to streamline and digitize more processes, and that includes the payments they accept.
Where is this all headed? Possibly to the ultimate digital marketplace—i.e., the metaverse—which will eschew cash or plastic entirely. Businesses will need to accept digital wallet payments if and when they participate in those immersive experiences. Even if they join in metaverse commerce after 2023, this year they’ll lay the foundation for it on the payments side.
2) Older Generation Consumers Will Ease into Next-Generation Payments
Spoiling the grandkids will look different in a cashless future. Picture Grandma slipping them a couple bucks on the sly using a peer-to-peer payment app instead of dollar bills.
But they’re not there yet. Baby boomers were the least likely generation to have tried a new payment method in the past year (only 29% compared with 79% of Gen Z). While we’re in this transition towards digital payment dominance, businesses need to accommodate consumers who remain reluctant (or unable) to pay online.
To keep serving those customers, businesses won’t shift to fully paperless and online payments just yet. In the meantime, we’ll see them encourage more customers toward digital adoption while continuing to offer traditional payment methods in the name of inclusion and accessibility. As late adopters receive a gentle education on newer payment methods, we’ll see the generation gap of digital payment adoption begin to close.
3) Organizations Will Offer Embedded Payments Everywhere
There’s no denying the connection between payment simplicity and revenue: the easier you make it for customers to buy, the easier it is to make sales. This year, we’ll see businesses speed up buying processes by using integrated payments to remove speed bumps.
In eCommerce, they’ll eliminate friction by embedding pay tools more smoothly in apps and websites. One example is Instagram, which links to your bank so you can purchase an advertised product straight from your feed with a single swipe.
Friction-free, integrated payments will transform in-person shopping, too. Seeing more consumers return to physical locations, retailers are working to streamline the brick-and-mortar buying experience. The Kroger grocery chain is testing shopping carts that track the items shoppers want to buy, allowing them to skip checkout entirely. Amazon Go stores, which already let customers purchase without checking out, continue to expand to more locations.
Whether we’re online or in-person, we’ll continue seeing businesses remove hurdles in the buying process we once thought were essential, simplifying the path to “Sold!”
4) Authentication Tools Will Help Merchants Raise Their Game Against Fraud
ACH payments have increased in volume by over 50% within a decade. The downside of ACH’s growth is that more transactions create more opportunities for fraudsters using the payment method. Businesses have recognized the heightened security risk of their transactions and are poised to combat it. According to “The State of Retail Payments in 2022” from Forrester Research, Inc., September 2022, “improving security (fraud, management encryption) jumped to the top of the list of online initiatives, with a significant 42% of retailers including it on their list of priorities.”
In 2023, more businesses will act on their anti-fraud priorities by using stronger payment security solutions to process ACH transactions. In their efforts to reduce risk, they’ll leverage authentication to verify account status and ownership in a seamless process that keeps payments easy for customers. After all, the payment experiences of the future aren’t just about keeping payments simple, but also safe.
Learn more about how CSG Forte solutions can help your business prepare for the future.
Should we include account status and ownership [SM1]