Top 7 Payment Trends To Watch In 2022

By Author: Sahil Verma
Total Articles: 160
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Payment processing has never been more difficult than it is now. This is due, in part, to the abundance of options available as well as the continuous advancement of technology.

The payment processing ecosystem through an online payment gateway is constantly evolving with new capabilities, and businesses must stay current on trends in order to provide the best possible customer experience.

With so many payment options available to merchants, deciding which to accept can be difficult. With continuous innovation and security measures that modernize the shopping experience, both in-person and online, digital payments are leading the way in the payment industry.

This post sheds light on 7 payment trends for businesses to watch in 2022 and beyond to help you make sense of the payments landscape.

1. Going Cashless Leads the Way for Digital Payment Trends

Credit and debit cards, mobile wallets, ACH transfers, and any eCommerce transaction are examples of common cashless transaction types. Cashless transactions are expected to skyrocket in the coming years, and businesses ...
... must prepare.

Going cashless is part of a larger payment industry revolution in which processing companies and businesses strive to improve their practices. Customer demand for digital transactions, as well as their expectations for payment options that meet their needs, is driving the evolution of payment processing.

2. Mobile Wallets Become Table Stakes

Mobile wallets have become increasingly popular in recent years due to their convenience, contactlessness, and security. Digital wallets are widely used for in-person transactions and eCommerce transactions using near-field communication (NFC) technology.

Users can easily make secure transactions by storing their debit and credit cards in an end-to-end encrypted digital wallet. Retailers can no longer simply accept cash, and digital wallets offer a safe, secure, and seamless customer experience at the point of sale.

Though mobile wallets are not as widely used as traditional payment methods, an increasing number of people are leaving their homes without their analog wallets.

Providing multiple payment options is now standard practice for any business that accepts customer payments, and digital wallets will continue to grow as a payment trend.

3. Tap-to-Pay with Contactless Credit Cards

Another trend that is rapidly gaining traction and popularity? Use of a contactless credit card.

More retailers are offering this as a safer payment option, and providing information about how contactless payments work is critical to educating skeptics. Contactless card transactions are generally faster than inserting the chip and cause less wear and tear on the card. Furthermore, contactless cards are more secure than magnetic stripe cards because they are processed with end-to-end encryption.

Though not all banks issue contactless cards, there are currently over 190 million contactless Visa credit cards in circulation, with a total of 300 million expected to be in circulation by the end of 2021.

Furthermore, most major credit card companies are now sending these out by default, and replacement cards are frequently receiving this upgrade.
According to American Express, the majority of its products use contactless technology, and many other financial institutions have several options as well.

Businesses should consider accepting contactless payments in conjunction with mobile wallet tap-to-pay adoption, as this payment trend continues to be widely adopted by consumers.

4. Paving the Way for More P2P Payments

Peer-to-peer (P2P) payments are better known by their app names. PayPal, Google Pay, and Apple Pay are well-known apps that enable users to transfer money from linked bank accounts or credit and debit cards to another user.

While consumers frequently use this to transfer money between individuals, some businesses can easily implement this payment method through the best online payment gateway to provide a more seamless experience for their customers.

Although P2P payments are not appropriate for many businesses, some do provide pay-to-merchant (P2M) options, with PayPal leading the way and being accepted by many retailers. However, there are some disadvantages for businesses looking to provide P2M.

These payments may take longer to process, be subject to higher transaction fees, and be less secure than other payment methods. This method may not be appropriate for all businesses, but for some, the simplified payment experience for the customer may be a deciding factor.

5. Buy-Now-Pay Later is Gaining Popularity

Buy-now, pay-later (BNPL) is a payment option that allows customers to spread out their purchase payments in a manner similar to that of a personal loan. These loans vary in terms, with some including interest and others dividing the purchase into multiple interest-free automatic withdrawals.

Other factors that distinguish BNPL payment services include whether the customer's credit is a hard or soft pull, late fees, payment cadence, and loan duration.

Depending on your customers' average price point and shopping habits, adding a buy-now-pay-later option could result in significant increases in business, particularly during peak shopping seasons. While it may not be appropriate for every business, this payment method is certainly making waves and has several providers to choose from.

6. Cryptocurrency and Cross-Border Digital Payments

In recent years, the use of cryptocurrency for payments has increased, with approximately 21% of survey respondents citing this as their primary reason for entering the cryptocurrency market. Although the value of cryptocurrencies is known to fluctuate, the investment potential is the primary reason for ownership, with 43 percent of survey respondents citing this as their motivation for holding cryptocurrency. This digital payment trend is one to keep an eye on, as its use has become more widespread.

There is also a growing trend in cryptocurrency-based cross-border payments. These transactions are frequently processed more quickly and automatically converted to local currency, resulting in a more seamless customer experience. PayPal has one of the most notable cross-border transaction offerings, allowing customers to buy, hold, transfer, and use multiple cryptocurrencies in global transactions.

7. Security Through AI and Machine Learning

Given the volume and variety of fraud that retailers face, businesses must rely on artificial intelligence and machine learning to improve their security measures. AI and machine learning monitor for real-time fraud indicators and decline transactions as needed, as well as providing insights into fraudulent transaction trends.

Payment processors are evolving to include real-time transaction analysis to detect fraud and provide valuable insights to retailers. Using machine learning to evaluate massive amounts of data from transactions helps businesses of all sizes optimize operations and work proactively against fraud.

Final Words

Payment processing innovations are critical to the customer experience in this age of speed and convenience. Adopting an integrated payment platform provides a secure and scalable method of serving customers. With helpful analytics and 24/7 support, your company can be confident that you and your customers are receiving best-in-class service.

Customers have many options for their shopping needs, and so do you when it comes to selecting a payment processor.
From small businesses to large enterprises, selecting the right payment processing provider is critical, as is prioritizing the customer experience.