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Payments trends 2023

Analysing the sustainability of rapid hypergrowth

Thanks to the acceleration of digital adoption, normalisation of usage and new capabilities in tech emerging at a rapid pace, digital payment methods have taken on a whole new life. Take a look at our Payments Trends report for 2023 to gain a better understanding of how, why and what’s next.

Explosive growth for digital payments

The digital payments industry has found itself in a whirlwind of change, partially driven by the global pandemic, but also maintained by the recent impact of failing banks. With a changing macro environment on our hands, financial institutions should keep an eye out for what could be next, including whether or not this period of rapid hypergrowth is sustainable. With new opportunities for growth constantly emerging, how can businesses make the most of this unique environment without compromising on the foundations of their offerings?

Given how normal real-time payments became during a period of intense overall uncertainty, this technology is now a fundamental and completely integrated payment method. To remain competitive, organisations need to embrace next-gen money-moving technologies and digital-native capabilities.

With success comes responsibility. As customer behaviours shift and new expectations emerge, businesses will need to remain flexible. Scalable digital solutions that meet customer needs will keep companies competitive and responsive to the market. As more fintech organisations enter the digital payments market, financial institutions should be continuously building upon and improving existing technologies, while also promoting digital capabilities to customers to remain top of mind.

Real-time payments have been around since 2015. Introduced by The Clearing House in 2017, the Real-Time Payments Network (RTP) initiates and clears payments almost instantly, at any time of day. Heading into 2020, real-time payments technologies were prepared to develop a strong foothold in the market.

With customer expectations for instant payments at an all-time high, the COVID-19 pandemic accelerated adoption as customers and businesses alike were prompted to utilise digital methods of payment almost exclusively. As a result, the push for access to instant, contactless ways to pay fast-tracked the adoption of real-time payments.

Today, real-time payments have continued to see significant year-over-year growth. With ample opportunity for expanding usage, the biggest challenges moving forward are likely going to revolve around fraud, particularly in hard-to-recover instances, as well as increased customer reaction time, leading to something like a run on the bank.

Recent adoption of both digital and real-time payments has left the ecosystem vulnerable in different ways. Financial institutions, payments facilitators, stakeholders and regulators looking to identify gaps in the process should all be asking themselves three specific questions:

  1. What investments are needed to strengthen and modernise technology and operations infrastructure to allow for continued innovation?
  2. How can we mitigate fraud risk and losses as transaction speeds increase?
  3. How do we ensure our workforces are adequately equipped to support these new payment methods?

As the systems that utilise real-time payments become increasingly complex, providers should be evaluating their technical capabilities to ensure that payments run smoothly and are kept safe, while financial institutions should work towards establishing industry-wide standards to keep things secure across the board. For more info, insight and ideas, download the full report.

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