Three key trends driving payments (2023 review)
Several long-term trends have accelerated this year and will continue into 2024
The Season For Predictions
It’s that time of the year when many organisations publish their 2023 reviews and their predictions for 2024. (For example, Visa’s is here.) These posts can be valuable, but such annual predictions often tend to reflect the current stage of a hype cycle. What’s hot at that moment. And what many firms have placed their bets on for the coming year.
In one year, not too much changes, but over a 5-10 year period, a lot can change. Often, the most impactful changes develop gradually over many years rather than burst onto the scene and have an immediate impact.
One example would be contactless payments, sometimes called tap to pay. The first big push with contactless payments in the UK was in the run-up to the 2012 Olympics in London. At that time, many businesses were sceptical of investing in the technology required to accept contactless payments. Yet in 2022, contactless payments comprised 27% of all payments in the UK. And this will continue to rise.
As an opposite example. Blockchain has often been mentioned as an emerging trend that can significantly impact payments. Views will be split on the exact effect that Blockchain has had so far. But it would be hard to argue the impact has been in line with the hype generated.
Yet, it can be helpful to look back at the prior year, especially in the context of long-term trends, as change is often incremental rather than exponential. When compounded over many years, large shifts can occur, which will have seemed inevitable.
Gloal Megatrends and Payment Trends
Even though it may seem obvious, it’s worth saying that payments and fintech do not exist in a vacuum. Technological progress is a reflection of broader society. With this in mind, looking at the bigger picture and understanding the key factors shaping the world over the long term can be helpful. PWC explains these so-called Megatrends in their report Five global shifts reshaping the world we live in as: