3 Digital Payment Trends You Can't Afford to Miss in 2024

Digital payments are taking over at lightning speed, revolutionizing how consumers and businesses exchange currency. The global transaction value of digital payments could top a staggering $14.78 trillion by 2027. With innovation in financial technology accelerating and pioneering startups popping up in fintech hubs like London, the payments ecosystem in 2024 will likely see disruption on an unprecedented scale.

Between surging mobile wallets, cryptocurrencies making inroads, and AI streamlining processes, the trends poised to shape the sector are both numerous and substantial. Finance Magnates discussed the three most important ones with Moshe Winegarten, the Chief Revenue Officer (CRO) of Ecommpay, a payment solutions provider.

Consolidation in Open Banking

2023 marked five years since the advent of open banking. While usage grew significantly, with over 11 million payments made in July, the market saw considerable consolidation.

“Ecommpay has seen demand for payment service providers that offer all-in-one solutions skyrocket,” Winegarten commented.

Merchants are increasingly looking for payment partners that provide integrated solutions encompassing open banking, card payments, and alternative payments . There is particular interest in features like payment confirmation, third-party verification, and payout capabilities.

“This process has only just begun and we can expect to see this consolidation continue well into 2024, it’ll even extend to orchestration providers as merchants increasingly look for one solution that reduces friction, cost, and potential points of failure,” the CRO of Ecommpay forecasted.

Evolution of Buy Now, Pay Later

Buy Now, Pay Later (BNPL) usage surged in 2023 as consumers leveraged these financing options to manage costs during the economic crisis. New regulations increased confidence in the BNPL market, though 45% of shoppers still want more oversight. According to estimates, the value of this market is expected to reach $125 billion within the next three years.

For example, nearly 70% of all PayPal customers in the United States have used the BNPL option at least once over the past 12 months, according to Statista data.

According to Ecommpay, the usage of BNPL “increased as consumers relied upon the service more due to the cost-of-living crisis, with 39% of consumers utilizing these credit options versus 25% in 2022.”

Heading into 2024, BNPL will continue evolving through regulation to enable responsible lending. With inflation easing, BNPL provides a way for merchants to capture growth opportunities while empowering budget-conscious consumers to purchase what they need over time.

“Ultimately, responsible lending is vital and must continue to be prioritized in 2024,” Winegarten said.

Continued Growth of Localized Payments

With rising inflation and economic uncertainty in 2023, global businesses have focused heavily on expansion to reach new markets and customers. However, simply entering a new geography is not enough, providing localized payment methods that resonate with local consumers is critical.

Research shows that if a shopper's preferred payment method is not available, 72% will abandon their purchase. Additionally, 82% of consumers indicate that they would trust a brand more if they saw familiar, local payment options during checkout.

“In 2023, consumers singled out travel (32% up from 22% in 2022), hospitality (29% up from 17%), and retail (26% up from 16%) as the top three sectors that they believe need to offer better payment options,” Winegarten commented.

In 2024, the demand for localized payments is expected to grow, especially in emerging markets like Africa and the Gulf countries. Businesses that invest in offering the right mix of global and hyper-local payment options will be best positioned to drive loyalty and sales.

What to Expect in 2024

The payment landscape will remain dynamic in 2024 as technology and regulations adapt to emerging business and consumer demands. Companies that closely track these trends, and adjust their products and services accordingly will gain a competitive edge.

“Ecommpay has seen growth in demand for local payment methods – spanning Europe, Asia, Latin America, and Africa – throughout 2023. Encouragingly, four in five consumers would trust a brand more if they saw a familiar option at checkout (82%),” Winegarten concluded. In his opinion, this will be one of the more important trends over the next year.