Towards the end of 2021, people’s shopping habits had returned to some degree of normalcy, if not complete normalcy. Although the boom in payments innovation and extensive consumer use of next-generation payment methods continues, the payments ecosystem has become nearly unrecognizable compared to a few years ago. This is owing to the widespread adoption of next-generation payment methods and Oracle Flexcube universal banking.
Now that the year 2021 has come to a close, we can look forward and analyze the significant changes and trends that are predicted to occur in 2022. This ranges from new technology and client expectations to tighter restrictions. And what retailers may do to position themselves for success in the next year.
The lasting legacy of COVID-19 on the payments industry
One of the most noticeable changes in consumer behavior was the movement away from cash payments when the pandemic hit. Although cash payments have been on a decreasing trend for some time, having fallen by 70% since 2010, the decline has been especially noticeable in the previous two years. Cash was utilized for 56 percent of all payments in 2010, 45 percent in 2015, and just 17 percent in 2020, compared to 56 percent in 2010 and 45 percent in 2015.
Because of the widespread abandonment of cash, customers’ expectations for digital alternatives have grown. The payments industry has reacted by bringing channels together and reducing friction between them at every step of the customer process.
Immersive consumer experiences have been built by harnessing the power of payments. Their popularity and complexity will only continue to rise in the next year and in the years to follow.
Open Banking, APMs, and biometrics will soar.
As Open Banking becomes more widely used, the financial technology industry will reach new heights in 2022. It is predicted that by September 2023, 60 percent of the population of the United Kingdom will be using the technology. Suppose my prediction turns out to be right. In that case, some of the most significant breakthroughs will occur in 2022 due to the increased rivalry in the payments and financial services industries.
In other parts of the world, some Asian governments, like Hong Kong and Singapore, are currently prioritizing Open Banking. It is expected that the use of this technology will increase in the future years, as citizens in these nations demonstrate a greater readiness to give their personal information.
In the United States, numerous banks partner with fintech businesses such as PayPal and Intuit, and American authorities have adopted a more lenient attitude as compared to their counterparts in the European Union. As a result, the industry is moving more swiftly toward standardization. Numerous projects, such as the Financial Data Exchange and Oracle Flexcube, are attempting to standardize Open Banking practices in the process.
Accordingly, the emergence of Open Banking would permit more open ecosystems, further sharpening competition and resulting in an array of enhanced options for clients, as previously stated. Incumbent firms in the payments market will have to change or risk becoming irrelevant shortly.
Given that the majority of the world’s population how to set up forex broker is now familiar with payment technology, the accomplishments of APMs will be enhanced. Customers’ expectations of merchants to accept digital wallets, BNPL, and cryptocurrencies will become more entrenched. In 2022, digital wallets and QR-based solutions, in particular, will be critical in bringing customers back into stores, with contactless becoming an absolute must for all transactions.
In 2020, contactless payments made in-store using a mobile wallet surpassed cash or credit card purchases for the first time on a global scale. By 2024, contactless payments are estimated to account for around one-third of all in-store transactions. In general, APMs will continue their upward trajectory toward being the most widely used means of payment in 2022. They will soon surpass cash and credit cards in all contexts and jurisdictions.
Artificial intelligence and machine learning are also expected to play a more critical role in improving client experiences in the future. The level of success that merchants achieve with these next-generation technologies will be determined by their approach to data and their recognition that, rather than being an add-on, information is essential for understanding customer preferences and optimizing their journeys through the shopping experience.
The use of biometrics is another technology that is expected to become much more prevalent in 2022, with many firms currently actively studying how they might be integrated into the payment experiences of their customers. They are already a standard feature for accessing banking applications. The rate at which they are being adopted and integrated into everyday routines is increasing. They are quick, easy, and secure.
According to the World Bitcoin Council, as bitcoin adoption continues to grow, more than 15,000 companies worldwide will accept Bitcoin by 2021. Following this trajectory, consumer use of these means of exchange will continue to grow in 2022 as they enhance their capacity to provide frictionless, rapid payments.
Adaptation is critical, and the “last mile” becomes vital.
Merchants have always had to adapt to new trends and technology in order to stay relevant, build their client base, and enhance their conversion rates. Businesses that have resisted digital transformation efforts must quickly reevaluate their strategy in light of the unprecedented rate at which customer behavior is changing.
Customer satisfaction is most directly impacted by the “last mile” of the purchase process, which is where final payments are processed. A successful acquisition strategy cannot be implemented without ensuring consumers can purchase while they’re at the online checkout or at a storefront.
2022, the year of payment partnerships and heightened customer demands
Consolidation has increased in recent years, and this is expected to continue in 2022. As collaborations between diverse stakeholders in the payment sector operate as an innovation facilitator, more cooperation and an acceptance of open ecosystems will lead to the emergence of new, groundbreaking solutions.
Consumers, who increasingly demand the freedom to pay for their products whenever and wherever they choose, will be overjoyed by this development. As a result, in 2022, the importance of frictionless payments will grow.
However, businesses will have to deal with a lot more than just frictionless payments. Intelligent consumer profiling must personalize payment choices to particular target populations. For clients to have the immersive payment experiences they want, the likes of last used, most used, and backup payment alternatives must be easily accessible.
How merchants can meet the demands of 2022
Having a flexible IT infrastructure that can adapt to changing consumer wants and behaviors is critical for merchants as they plan for the year ahead.
Payments partners are more important for both present and future needs. Suppose they have a payments partner willing to share their knowledge and take a consultative approach. In that case, businesses may get a thorough grasp of the finest products and crm for forex brokers services to fulfill their goals.
Merchants may look forward to 2022 with renewed hope if they have the appropriate relationship in place and use Oracle Flexcube 14.x to better understand their consumers and offer best-in-class experiences.