Payment Trends We Think Will Be The Most Influential In 2023

10 years ago, the landscape of the payment industry was abuzz with new capabilities, new competitors, new rules, and new customer expectations. Primarily, at the time all this newness centered on mobility in response to the shift consumers had made towards their smart devices, integrating them into their daily lives and in so doing, challenging the payment industry to include payments into the mobile mix.  

It’s fascinating to look back to 2013 and think that the very payment options that we now take for granted, such as mobile wallets and mobile payments, proffered such a monumental shift in how we transacted at the time. 

With that in mind, let’s look at the payment trends that are likely to be the most influential in 2023 – keeping in mind that these trends will be considered the first few obvious and rudimentary steps forward in another powerful evolution in the payment space. 

Here are the top 7 payment trends we believe will start to take hold in South Africa. 

1. Mobile Contactless Transactions to Increase 

Around two to three years ago, consumers breathed a sigh of relief into their masks every time they were able to transact using contactless card payments. Understandably, many were relieved to have a more hygienic and less risky way of transacting during the Covid-19 pandemic.  

This year, though, we believe that mobile contactless transactions will overtake contactless card payments. Not to say that card-present payment volumes will decrease. However, given that Africa is thought to have around 120 million new mobile phone subscribers by 2025, we can expect to see more consumers rely on their devices to transact.  

2. Pay by Bank 

Also referred to as ‘account-to-account’ payments, ‘pay by bank’ technology enables merchants to take payments directly from the customers’ bank accounts – without a card and in real-time.  

We think this is likely to become more popular in South Africa, particularly in the SME market, due to the fact that merchants can avoid the ‘swipe fees’ attached to card use and increase their profits. 

3. Security And Trust Become Critical 

Cybersecurity has been an ongoing issue for some time now, but recently there’s been a surge of cybercrime as eCommerce expands, non-cash payments increase, travel opens up, and more people adopt a ‘hybrid’ work-home lifestyle and blend their private and professional lives. 

While cybercriminals will continue to target small businesses who don’t typically have the resources or access to security tools, we should also see an increase in new methods to scam consumers and gain access to sensitive data and money.  

As a result, this year will see a more focused emphasis on cybersecurity in payments in order to maintain trust with users, business owners, and consumers. Specifically, we should see more next-gen authentication technology, such as EMV 3DS, more security in global eCommerce, and more businesses investing in cybersecurity. 

4. Embedded Lending Spikes 

This year should see a major hike in embedded finance, with more businesses pouncing on the opportunity to sell embedded financial services. We believe that there will be a focus on bundling products and services with payments for consumer use as more companies embrace embedded lending as a fintech strategy to drive growth.  

5. BNPL Matures 

The buy now, pay later (BNPL) segment has garnered success in South Africa over the years, especially for those consumers battling tighter budgets who use the BNPL to purchase household necessities, school uniforms, and electronics.  

Given that this segment already exists and has experienced its growing pains, we believe that this trend will gain sustainable traction as it matures and increases in popularity. 

6. Real-Time Payments Take Centre Stage 

Compared to traditional processing, real-time payments are faster for both consumers and businesses. Unsurprisingly, the real-time payment market growth is expected to hitch a ride to the stars, enabling faster, more efficient real-time payments for business-to-business transactions. 

From what we’ve seen, new technology and customer expectations are fueling the launch of new instant payment schemes and the general growth of real-time payments. Moreover, from a global perspective, the implementation of the ISO 20022 messaging standard is expected to have a positive effect on real-time cross-border payments and enhances security and compliance. 

7. Investment In Multiple Payment Choices 

While this may be true the world over, South African consumers in particular have need of multiple payment options in order to go about their daily lives. From tapping their digital wallets and using BNPL, to paying with government benefits, we need payment choices. 

Following this trend presents businesses with more opportunities to maximize customer choice and create loyal experiences. 

We Can Help 

These trends have the power to completely disrupt the payment industry and alter the way consumers in South Africa transact – and even conduct their daily financial lives. That said, keeping on top of emerging technologies and regulatory requirements can be challenging.  

Let Huge Connect assist with simplifying the complexity of managing your payment environment, introducing the latest platforms, capturing the right data, revealing real-time visibility, more easily allowing you to track payments and most importantly making sure you stay connected to utilize all the amazing developments to their full potential.  

Let’s Connect.