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2022: Predictions for an ever-changing payments landscape

2022: Predictions for an ever-changing payments landscape

Lee Jones

Managing Director Northern Europe, GSV at Worldline

It’s the start of 2022 and the payments ecosystem is almost unrecognisable compared to a few short years ago. Despite consumer behaviour returning to some form of normality in the latter part of the year, levels of innovation and the adoption of next-generation payment methods have continued to rise dramatically. In order to remain competitive, grow and maintain customer engagement, merchants must continue to adapt to new trends and technologies, at a pace that has never been seen before.

With a new year fast approaching, we consider some of the key takeaways from 2021 and look ahead at the expected changes and developments for this year.

Cashing out - bidding farewell to notes and coins

One of the greatest shifts in consumer behaviour in 2021, as a result of the pandemic, was the dramatic move away from cash. Although cash payments were already on a downward spiral, declining by 70 percent since 2010, according to UK Finance, the decline has been particularly notable over the last two years.

This shift increased customer expectations for digital payments and the industry responded by working hard to create and maintain entirely frictionless user journeys. As part of this response, new customer experiences have been created that will continue to develop in the coming years.

Fintech predictions

The COVID-19 pandemic has accelerated the need for digital wallets. In addition to offering a frictionless user experience - more businesses have started accepting digital wallets for contactless payments - they are on track to becoming the preferred payment method and could, in time, be used as a means of combatting identity fraud.

Bolstered by a surge in the adoption of new applications and services in 2021, Open Banking will continue to make a significant impact by creating opportunities for consumers, FinTechs and the financial institutions wrestling with the pace of digital transformation. Those that embrace innovation and harness its power will be in a prime position for growth and sustainability.

Meanwhile, AI and machine learning are poised to play an even greater role in enhancing customer experiences. Merchants must treat these next-generation technologies as essential parts of their business strategies, rather than mere bolt-ons, in order to truly understand customer preferences and optimise their journeys.

Another burgeoning technology to look out for in 2022 is that of biometrics. Fast, efficient and secure, biometrics are already a common security feature for unlocking banking apps, and the rate of their adoption and integration into our everyday lives continues to increase.

And finally - lest we forget - the growing crypto phenomenon. It has been reported that over 15,000 businesses worldwide are already accepting Bitcoin and from 2022 we will see continued consumer adoption of cryptocurrencies as these methods of exchange progress their capabilities to enable frictionless, real-time payments.

Summary of Worldline’s key verticals

All of Worldline’s verticals have at least one key, clear theme: the facilitation of payments. Within EV charging we have seen a massive need for more charging points as electric cars become more popular and, in turn, require a reliable payment system for customers. While for grocery retail we have seen the emergence of checkout-free stores and how, if they become more commonplace, retailers need a 24/hr working payment infrastructure.

The pandemic has also caused seismic shifts for the hospitality sector too and merchants are witnessing the new, higher, levels of service customers now expect. But this can be helped through the latest developments in technology, which QSR industry merchants are also turning to in order to deliver a seamless customer experience to boost both retention and revenue.

Coronavirus has encouraged, and in many cases obliged, people to stay at home, which has led to a more hybrid shopping experience between online and in-store shopping. Indeed, this was seen in the speciality retail sector as Black Friday and Cyber Monday sales took place in November. Similarly, grocery retail vendors enabled home delivery orders for their customers, allowing them to do a risk-free shopping without leaving their front door.

Restrictions have, furthermore, massively impacted business travel as well – it’s likely we will never fully return to our pre-pandemic, cross-border, work tendencies. Why would we when we can save time and money by conducting a virtual call?

These fraught times have indeed brought light too. In the vending industry merchants are implementing increasingly innovative vending machines, such as through old newspaper stands and selling health-conscious foods. And the latest increase in the contactless limit, from £45 to £100, now allows us, the customer, even greater speed of purchase when in a store. Security concerns exist but they do with everything and Worldline is here to ensure individuals can rely whole-heartedly upon the systems they use at all times.