What Will Happen To The Payment Industry In 2023?
There have never been more ways for money to change hands than in the world we live in today.
Advancements in payment technology have made transferring sums of money, large and small, an easy and quick process.
This is true for both consumers and those offering their products and services. But with so many ways for people to make payments and get paid, the question of how things will continue to progress is an interesting one.
Here are a few predictions on what will happen to the payment industry in 2023.
Contactless & digital payment options will continue to grow
Since the pandemic, there’s been a considerable spike in people opting to use contactless payment options wherever possible. Understandably so.
The freedom and relative safety contactless payments offer when compared to traditional card payments (and hard cash) is a clear advantage to consumers, from a hygiene perspective.
Add to this the speed and ease of use offered by contactless payments, there’s no denying the future of the payment industry is a contactless one.
It’s good news for people who can make use of contactless card payments and digital currency in general. But vendors will need to make sure they stay up-to-date with important developments in the payments industry.
Digital wallets like Google Pay and Apple Pay are already widely used, with UK Finance reporting that 17 million people were using the technology regularly by the end of 2020. On top of this, a recent study suggests over 60% of the world’s population will be using digital wallets by 2026.
If these numbers are anything to go by, the convenience of digital wallet phone payments could slowly wipe out the use of contactless payments with a physical card entirely in the years to come.
The economy will affect spending habits
The cost of living crisis means prices of everyday items are going up, but consumers are willing to spend a lot less.
This isn’t helped by the fact wages are lagging, when the price of everything is on the rise.
In other words, people aren’t making more money, but they need to spend more to get by.
So while we will undoubtedly see spending figures go up as a result of inflation, people’s willingness to part with their cash is at an all-time low.
We’ve already seen some evidence people are moving back towards physical cash, away from digital, for the first time in a long time.
A recent report published by Nationwide found the amount of cash being withdrawn from their ATMs rose from 2021 to 2022 – the first time it’s happened in 13 years.
However, there’s the possibility this sharp rise was simply a bounceback, given the pandemic severely affected people’s need to visit cash machines.
But even if some people prefer to stuff their wallets instead of their bank accounts, don’t expect digital payments via card to go anywhere anytime soon. We’re not heading in reverse.
In fact, it’s completely the opposite. Almost 9 in 10 payments made by card today are contactless, meaning people continue to embrace the speed and convenience factor in spending.
Even if they don’t feel like spending quite as much.
Two-factor authentication and biometrics will drive better payment security
As technology advances, there will always be those who follow the trend but choose to use their skills for evil.
The introduction of contactless payments years ago caused a lot of worry at the time – just how secure would these new payment methods be?
Thankfully, security advancements are as strong as they’ve ever been.
And with a huge number of shoppers taking advantage of steps like two-factor authentication and cryptic passwords, a lot of criminals have had a hard time adapting to tech-savvy consumers.
Banks offering online banking services through their websites or dedicated apps have needed to step up their game in recent years due to the rise of digital wallet payments. Many now promote a multi-factor authentication process, strong passwords and other biometric security measures to customers.
Bank fraud figures are showing signs of promise, thanks in part to these security advancements. According to UK Finance, in the first half of 2022 banks were able to prevent the theft of £584 million.
Thankfully, when it comes to transactions between businesses and customers, security has never been tougher.
Handepay offers fast and secure card payment solutions for all types of businesses. Whether it’s card machines, online payments or phone payments, they have all the tools to help your customers spend with you and to keep their – and your – information safe. For more information, check out https://handepay.co. uk/