What happens next? 10 payments industry trends to watch out for in 2022

Wow, what a year it has been. For sure there have been some highs and lows, but overall it continues to be an exciting time for the payments industry.

Undoubtedly COVID-19 is going to continue having an impact on us all at least for the next few months and maybe all of next year, but there are still reasons to be optimistic about the future.

The industry continues to evolve quickly, it’s a great journey to be a part of, and we are excited about what is coming next as we start to think about 2022.

With that in mind, here is our annual prediction of 10 trends to watch out for in payments in the next 12 months.

1. More and more Qatari’s are shopping online, changing the digital payments landscape

Consumers confirmed this was true. When we asked in April, 18% of consumers told us they shopped online for the first time during the pandemic. With 38% of consumers telling us they are planning to shop online more even when COVID-19 is no longer a factor in their lives, we should see this shift to alternative payments continue.

2. Payments becomes a tool to track spending

This is not new. We have all observed the rise of digital banks, and one of the main advantages of these financial services is a clearer view of how, when, and where you are spending money. But like many other trends, COVID-19 has dramatically accelerated this development.

Apps that not only do this, but also offer tools and financial advice will only grow in popularity in 2022. Prepaid digital payments methods that prevent overspending will also be popular.

3. SCA will drive mass adoption of biometric authentication

One of the inevitable consequences of this is going to be a huge increase in the use of biometrics to verify payments. With the growth of mCommerce that we have seen before and during COVID-19, it seems very likely this will accelerate beyond predictions made at the initial SCA deadline in 2019. Juniper Research has already predicted that biometrics will be used for more than 18 billion transactions in 2021, with a value exceeding $210 billion in 2021.

4. Real-time payments goes global

One forecast predicts the global real-time payments market will increase at a rate of +29% CAGR between 2020 and 2025. For sure COVID-19 has accelerated demand for real-time payments and this will contribute to its growth; from business continuity, to immediate need for finance for survival, and a changing attitude to cash during the pandemic, there are multiple contributing factors that mean demand for real-time payments will increase further.

5. A renewed focus on 5G

But at the same time, the need for the in-store shopping experience to be as frictionless as possible is now more important than ever. Almost half (46%) of businesses told us that they had lost sales in 2020 because their checkout times were too slow. So the use of 5G technology to overhaul the checkout will be back at the top of retailers’ agendas.

Almost half (47%) of stores told us that 5G will mean the end of the traditional checkout, and more than half (53%) believe that Amazon-Go style frictionless checkouts are the future of retail. Omnichannel experiences where consumers shop in a store and then pay via a digital checkout on a smartphone app are also on businesses’ radars.

6. A surge in subscription models

The growth will not be limited to digital either. Pret A Manger recently launched the first in-store coffee subscription service in the UK, and we expect to see similar models populating malls and independent stores soon.

Also, only the initial purchase of a subscription is subject to PSD2 multi-factor authentication. So for some businesses, launching a subscription service may be a way to reduce friction in the online checkout.

7. Paying with crypto goes mainstream

We have already seen announcements from some of the biggest payments technology operators that enabling customers to pay merchants using cryptocurrencies in 2021 is a priority, potentially paving the way for fast growth in this area.

8. AI and machine learning as the cornerstone of fraud prevention

Banks have spent as much as $217bn on AI applications already, and in 2021 AI and machine learning based systems will be the standard in fraud prevention.

9. Businesses will turn to digital loyalty apps as well as payments

10. Further growth of digital peer-to-peer payments

Similarly, while the international remittances market is predicted to shrink overall in 2021, the percentage of remittances that are made using digital remittance methods will significantly increase, with the declining use of cash and greater familiarity with these services due to physical remittances stores being closed at points during 2020.

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