Payment Technology 5.0: What Awaits Us in 2024

It’s almost the end of the year and every business entity is preparing financial statements for the closing year. Learning where we are at the moment and comparing our planned objectives with the reached goals is typical for this period. 

However, we’re already looking at 2024, following the trends in fintech and processing (this time not payment processing but observing) how the ongoing changes will help ThePayPortal additionally improve our business operations. 

Hop on and join us in this sightseeing tour of payment technology in 2024. 

The Further Rise of Mobile Payments

Mobile payments are contactless transactions carried out in person via a mobile phone, either via tapping or a QR code. They saw the first significant surge during the COVID-19 pandemic and have kept growing in use ever since. 

To be able to tap to pay with their mobile phone, a person uses a digital wallet or a contactless bank card in a brick-and-mortar store. Such cards come with electronic chips read by POS terminals. The near-field communication technology (NFC) makes this wireless data transfer possible. 

Paying via QR codes is another tech trend that’s gaining momentum. From apparel stores and supermarkets to cafes to restaurants, customers have another contactless payment option at their disposal.

Software Point of Sale (POS)

Merchants who want to accept contactless payments – either via credit cards or digital wallets – need to use contactless POS terminals. These cutting-edge devices are different from traditional POS hardware that can only read magstripe and chip bank cards, so that the transactions are processed in a faster and more secure way. 

This payment 5.0 world offers even more innovative technology for contactless payments – software POS, also known as softPOS. Instead of buying a tangible POS device, merchants can now simply download a softPOS app to their smartphones. As the customer taps onto the smartphone, the payment data is transferred between the buyer’s digital wallet or card and the merchant’s softPOS. If there are enough assets in the payer’s account, the transaction is finished.

This advancement will additionally disrupt the digital payment market in 2024 and beyond. 

Digital Wallets Marching Forward

There are about 4.64 billion smartphone users in the world today, with an estimate that the number will surpass 5 billion in 2028. 

But this is a section about digital payments in 2024, one might say. 

The link here is that every smartphone is a potential payment device. What you need to pay with your phone is a digital wallet. 

A digital wallet is a software solution – typically an app – in which you can store your debit and credit card data. Hence, when making a payment, there’s no need to bring your hard-copy bank cards around with you. Just open the digital wallet on your phone, select the card, tap the phone onto the POS, and you’ve made your payment. 

Currently, the most widely used digital wallets are Google Pay, Samsung Pay, Apple Pay, PayPal, and AliPay. In 2022, 2.8 billion digital wallets were in use, and amounted to almost half of all the global digital transactions

TPP Intel: Bear in mind that neither you can install Apple Pay on Android devices, nor can you use Samsung Pay and Google Pay on Apple devices. PayPal and other, alternative digital wallets, can be used on both operating systems. 

They’re even more practical for online transactions because you don’t have to manually enter your payment card. Once you enter and store all the relevant payment info into your digital wallet, everything’s in one place, ready for digital payments. 

In 2024, we’ll see the further adoption of biometric authentication to additionally secure digital wallets. Smartphones – see why we started this paragraph with them – now come with incredibly advanced cameras and sensors. Consumers can scan their eyeballs, faces, or fingerprints to confirm their identity. In the case a smartphone with digital-wallet data gets stolen, biometric authentication dramatically reduces the risk of fraud or unauthorized payments. 

Finally, we can expect the additional surge in the number and power of crypto wallets. 

Cryptocurrency Payments – The New Frontier

Cryptocurrency concept, Person hand typing on keyboard computer with cryptocurrency icon on virtual screen.

Now that we’ve mentioned crypto wallets, let’s see what might happen with cryptocurrency in 2024. Digital currency is already old news, but with constant and unpredictable twists. Unlike fiat currencies – the paper money printed by national governments – digital currency works differently: each of us leaves their financial account data on a digital block. 

As each new block leans onto the previous one, we get a chain of blocks, hence: blockchain. Working as a decentralized ledger of all payments made within a peer-to-peer system, blockchain has paved the way for digital transactions that are not controlled by central banks or other financial institutions. Lack of control naturally leads to lower transaction fees and higher payment speed. On the other side, this lack of regulative is always fertile ground for potential fraud. 

So, we can definitely expect that more people start using cryptocurrency for payments in 2024. Likewise, international financial regulators will work harder on imposing global regulations on crypto assets, as reported by the International Monetary Fund (IMF).

Alternative Purchase Options

The constant technological advancements described above have already revolutionized the way we buy things and pay for them.

Up to now, such innovations have made way for BOPIS, BNPL, and curbside pickups. Let’s now see the predicted status of each of them in 2024. 

Buy Online, Pick up in Store (BOPIS)

In simple terms, when we buy something online and pick it up in store – hence the acronym BOPIS – the merchant offers a win-win situation. 

We can shop around online, enjoying the comforts of present-day eCommerce, only to make up our minds and finally buy the item we need. 

The merchant, on the other hand, doesn’t have to bother with shipping, which is not a small benefit. 

A study published on the Research and Markets website predicts that the global BOPIS revenue will have surpassed $700 billion by 2027. 

TPP Intel: In a customer journey that ends with a BOPIS transaction, the merchant should give hints along the way so that the customer knows that the checkout is available at the click of a mouse – or the tap of a hand. To paraphrase the old adage: behind every smooth and secure checkout stands a hi-tech payment gateway. ThePayPortal is here to provide such payment gateway services for merchants across the globe. 

Buy Now, Pay Later (BNPL)

The BNPL payment benefit is different from BOPIS in the way that the latter must cater to a comfortable customer journey, and the former includes a flexible payment rhythm. It sounds more complicated than it actually is: a customer buys a product or service at this moment and takes it home, but actually divides the amount to be paid into several instalments agreed with the merchant. 

The unparalleled release of cutting-edge AI tools will keep improving the BOPIS and BNPL services, with AI-assisted customer journeys.

AI to the Rescue

Artificial intelligence is a broad term and people colloquially often use it to misinterpret current affairs in payment technology. 

For starters, it’s good to know that fintech is too delicate an industry to rely on interpretations of imperfect machines. Hence, we can’t expect that any major operations or decision making will be completely assigned to AI-tools.

What we’ll certainly see in 2024, though, is, as follows: 

  • Increased use of machine learning in providing statistical reports. 
  • Identifying patterns in customers’ behaviors.
  • Mitigating risks from bringing conclusions based on previous payments.
  • Offering assistance to buyers in terms of budgeting, cross-selling, and up-selling. 
  • Further advancement of augmented reality and relevant AR tools based on AI-assisted research

As in many other industries, this is only the dawn of the AI-powered age, so some new AI fintech trends might even surprise us. 

The Final Word

Based on the previous few years, in which we witnessed several quantum leaps in fintech, there’s no reason for 2024 to unfold differently. 

We’re looking forward to further growth of user-centered payment tools that both merchants and their customers will enjoy using. 

Finally, if you need assistance with online billing, merchant accounts, and risk mitigation, or simply want to get in touch, feel free to contact us.