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5 Innovations in Payment Technologies Impacting Global Commerce

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Customer using smartwatch to complete a contactless payment

Advancements in digital payments technologies have made shopping, paying bills, and transferring money more convenient, efficient, secure, and accessible, revolutionizing the way people perform financial transactions. Easily made with a click of a mouse or a tap of a finger, digital payments are now a part of consumers’ day-to-day lives, and the technology behind them has helped facilitate cross-border business for companies and growing economic opportunities for people in developing economies.

 The digital payments market is projected to reach $19.89 trillion USD by 2026,1 making it clear that merchants must continue to embrace new payment methods to retain existing customers and attract new ones. Here are five digital payment trends to watch.

 

1. Digital wallets

By storing consumers’ credit and debit card information on their device, digital wallets expedite the payment process, making it more straightforward and convenient. In 2023, the global market size of mobile wallets reached $8 billion USD—and it is projected to reach $88.36 billion USD by 2033.2 A majority of consumers already use mobile wallets regularly with 59% reporting use in the last 90 days according to a 2024 survey.3 

For merchants, digital wallets provide multiple potential benefits, including higher conversion rates and lower cart abandonment rates. The average cart abandonment rate is currently 70%, with 22% of US online shoppers citing a complicated checkout process as their reason for not following through with a purchase.4 By eliminating roadblocks to purchase, such as manually typing in a credit card number, digital wallets could help create a more frictionless checkout process, leading to more sales.

 

2. IoT and connected commerce 

Customer using card for a tap to pay transaction for ice cream


The Internet of Things (IoT) has expanded the acceptance network for payments with smartphones, connected cars, smart home devices, and wearables paving the way. Currently, Tap on Mobile is the top connected commerce experience of interest among consumers with 73% saying they are comfortable making payments by tapping their card or phone onto a merchant’s mobile phone.3 Tap on Mobile is popular with merchants as well because of its simplicity. To accept payments, merchants simply download an app to their mobile device, enabling an ordinary smart phone or tablet to function as a point-of-sale system without specialized hardware.

While use of mobile devices is already commonplace, there is growing interest in using other networked devices. For example, 53% of consumers saying they are interested in making payments through a connected car and 57% are interested in making payments through a smart home device.3 As for merchants, 45% anticipate that connected commerce will provide significant value to their business over the next three years.5


3. Buy now, pay later

Another popular digital payment type among consumers is the option to “buy now, pay later” (BNPL). This is a type of short-term financing that enables online shoppers to pay for their purchase over time without interest. BNPL is particularly popular among younger consumers, with 45% adoption among Gen-Z shoppers and 48% among Millennials.3 Reasoning for BNPL use varies among consumers. Financially fragile households are likely to use the service frequently for relatively small purchases, while more financially stable households appreciate that BNPL helps them avoid paying interest on credit-finance purchases.6

While BNPL is already widely used in some regions, adoption is still gaining traction in others. For example, 73% of consumers in the Asia-Pacific and 56% of consumers in Latin America reported using BNPL as a payment service in the past 90 days.3 In other markets, those numbers are more modest: 20% in North America and 22% in Europe, the Middle East, and Africa. Although these regions have been slower to adopt BNPL, demand is growing.3 In fact, as customers around the world embrace BNPL, the global gross merchandise value is projected to reach $1,088.3 billion USD by 2029.7

 

4. Frictionless cross-border payments

Cross-border payments make it possible to connect financial institutions in two or more countries. Demand for frictionless—even instantaneous—cross-border payments is growing, with 66% of consumers saying they are interested in the ability to transfer funds to another person internationally in real time.3

 Eager to keep up with consumer demands, 51% of Fintechs and venture capitalists identified cross-border payments as a segment with the greatest growth opportunity in the next five years.8 An experienced payment service provider can help merchants facilitate smooth cross-border payments by accepting popular local payment methods, navigating currency exchange rates, and mitigating fraud risks.

 
Person on the phone standing over desk using laptop

5. Evolving B2B payments system

While the rise in digital payments has been driven mainly by consumer demand, the B2B segment of the market is not far behind. Digital payments technologies present new ways for businesses to process transactions, move money, and offer payment services similar to consumer payments experiences. In fact, 43% of companies overall are considering investing in commercial payment solutions.9

Merchants now have access to payment services that are cost-efficient, digital-first, integrated, and fast, with comprehensive and holistic services that include: 

  • Full-service automation. This includes automated payments, invoicing, and subscription billing.
  • System-wide security. Payments systems can now maintain security across the entire payment process, including fraud prevention, transaction monitoring, and compliance.
  • Streamlined payments functions. Look for optimized processes, including payment checkout, payment orchestration, and monetization.
  • Interdepartmental functionality. The latest payments systems can be integrated across departments and platforms.
  • Real-time tracking capabilities. This covers inventory tracking, sales reporting, and customer data management.

  

Two people standing at an office desk looking at a computer monitor

Putting emerging payments to work

The modern payments landscape is full of solutions that can help merchants optimize their operations and their sales. At Discover Global Network, we are dedicated to helping merchants determine which solutions are right for their customers and their business. Find out more at discoverglobalnetwork.com.

 

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  1. Fortune Business Insights. (2024, June 24). Digital Payment Market Size, Share & Industry Analysis, By Payment Type (Mobile Payment, Online Banking, Point of Sale, Digital Wallet), By Industry (Media & Entertainment, Retail, BFSI, Automotive, Medical & Healthcare, Transportation, Consumer Electronics, Others), and Regional Forecast, 2019-2026. Accessed 11 July, 2024 from https://www.fortunebusinessinsights.com
  2. Precedence Research. (2024, February). Mobile Wallet Market Size, Share, and Trends 2024 to 2033. Accessed 11 July, 2024 from https://www.precedenceresearch.com/mobile-wallet-market
  3.  S&P Global Market Intelligence 451 Research. (2024). [Unpublished raw data from global consumer survey]. Commissioned by Discover Global Network.
  4.  Baymard Institute. 49 Cart Abandonment Rate Statistics 2024. Accessed 11 July, 2024 from https://baymard.com/lists/cart-abandonment-rate
  5.  S&P Global Market Intelligence 451 Research. (2024). [Unpublished raw data from global merchant survey]. Commissioned by Discover Global Network.
  6.  Aidada, Felix; Mangrum, Daniel; and van der Klaaw, Wilbert. (2024, February 14). How and Why Do Consumers Use “Buy Now, Pay Later”? Liberty Street Economics. Accessed 11 July, 2024 from https://libertystreeteconomihttps://libertystreeteconomics.newyorkfed.org/2024/02/how-and-why-do-consumers-use-buy-now-pay-latercs.newyorkfed.org
  7.  Global Newswire. (2024, February 27). Global Buy Now Pay Later Market Report 2024-2029: Regulatory Activities are Projected to Pick Up Pace in the Global BNPL Market in 2024. Accessed 11 July, 2024 from https://www.globenewswire.com/news-release/2024/02/27/2835726/28124/en/Global-Buy-Now-Pay-Later-Market-Report-2024-2029-Regulatory-Activities-are-Projected-to-Pick-Up-Pace-in-the-Global-BNPL-Market-in-2024.html
  8. S&P Global Market Intelligence 451 Research. (2024). [Unpublished raw data from global fintech vender and venture capitalist survey]. Commissioned by Discover Global Network.
  9. S&P Global Market Intelligence 451 Research. (2024). [Unpublished raw data from global payments survey]. Commissioned by Discover Global Network.


 

The information provided herein is sponsored by Discover® Global Network. It is intended for informational purposes, and is not intended as a substitute for professional advice.