This week’s payment news roundup covers the present and future of the digital transformation, the latest types of fraud, and details on consumer payment preferences.
10 things will define the digital transformation in 2022
We recently shared our payment industry predictions for 2022. Pymnts.com shares their take on the topic with a list of 10 things they predict will define the digital transformation this year. Here are a couple items they found noteworthy.
Traditional banks will lose their grip on small businesses to fintechs. Historically, small and medium businesses (SMBs) have used traditional retail banks. The business owner had to serve as the systems integrator and connect their business checking account to their accounting software, payments provider, and more.
A better alternative has started to emerge as fintechs now provide a simplified experience by bundling various business applications into a single platform and allowing them to turn features on and off as needed. These all-inclusive platforms are causing SMBs to start to raise their expectations when it comes to their business banking relationships.
Checking out in the store will move to the cloud and create new competition for traditional payment methods. The recent rise of contactless payments has consumers wanting all payments and checkouts to be that quick and frictionless. Consumers used to quick checkouts don’t want to stand in line.
As a result, Pymnts.com predicts that businesses will move to cloud-based point-of-sale (POS) experiences that “outsource checkout to the consumer.” Cloud-based POS systems allow businesses to introduce new payment methods at checkout, such as mobile wallet apps or their own branded payment methods
Small businesses count on digital payments to drive growth
PaymentsDive detailed a recent Visa study that surveyed small and micro businesses, as well as consumers, about digital payments. Visa’s study shows how the digital shift in payments hasn’t been limited to large corporations. Here are a few of their survey findings.
Small and micro businesses:
- 82% said they will accept digital payment options this year.
- Nearly 60% said they’re only accepting digital payments, or plan to only accept digital payments within the next two years.
- Close to one-fifth said they’re already cashless.
Consumers:
- 46% said they’ll use digital payments more frequently this year.
- 16% are only using digital payment methods, and 25% believe they’ll switch to digital-only within the next two years.
Digital DNA helps online lenders make new account fraud an old problem
In 2020, identity fraud cost consumers over $56 billion. This month, Pymnts.com discussed new account fraud, which they defined as “bad actors leveraging fake identities to open new accounts at scale and use them for fraudulent purposes, such as money laundering.”
They noted that one major target for identity fraud is buy now, pay later (BNPL) - one major card issuer saw 60,000 fake applications in just one week. As a result, some BNPL providers are now considering behavioral analytics as a way to potentially verify customers and help prevent fraud.
ISVs concerned about fraud can visit our blog post on recognizing and managing payment fraud.
Report: thirty-five percent of consumers will switch grocers and pharmacies for better digital features
Pymnts.com and Toshiba Global Commerce Solutions surveyed over 2,000 consumers to find out how technology has affected consumer behavior. Their findings underscored the continuation of the recent digital shift in payments:
51% of grocery shoppers said the ability to check inventories was among the top influences on their store loyalty.
33% of grocery customers and 30% of pharmacy shoppers said being able to use their preferred payment methods was a leading influence on their store loyalty.
35% of grocery and pharmacy shoppers said they’d be highly interested in switching merchants for better digital capabilities.
Trends like open banking and BNPL will sustain ecommerce’s hot streak, a report says
Juniper Research predicts ecommerce volume will continue to increase worldwide, driven by trends such as open banking, BNPL, and single-click checkout wallets. Ecommerce volume totaled $4.9 trillion worldwide in 2021, and Juniper predicts it will reach $7.5 trillion in 2026.
Wider availability of multiple ecommerce channels such as mobile devices, will help drive this growth. Juniper notes that physical goods will continue to dominate ecommerce spending, and will account for 82% of payment value by 2026. To maximize this trend, Juniper suggests payments providers should support buy now, pay later plans.
Conclusion
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