Four ways payments will change in 2024 – Pay By Bank, digital footpaths, loyalty and insights

Four ways payments will change in 2024 – Pay By Bank, digital footpaths, loyalty and insights

By David Maisey, CEO of MultiPay Global Solutions

With every passing year, fresh trends emerge, and existing ones gain momentum. New possibilities in payments, changing consumer habits and an ever-evolving economic landscape combine to constantly evolve and revolutionise the ways we conduct transactions, manage our finances, and how we choose to interact with money itself. In this era of fast-paced technological innovation, forecasting the on-going trajectory of payments innovation requires us to keep focus on emerging trends and shifting consumer and retailer habits.

As we head into 2024, it’s imperative that retailers examine where true operational efficiencies can be made, especially in the case of where these savings can be passed on to customers. To prepare in the way that’s best for them, retailers need to know what lies ahead. Here we explore the top payments trends for the year ahead, with an eye on how they’ll impact retailers and consumers alike.

In-store Pay By Bank goes mainstream

The arrival of Pay By Bank, a new alternative payment method (APM) that allows consumers to pay for goods and services in-store via an account-to-account transfer, is already seeing growing traction among retailers. Building on consumers’ desire for convenience and security, Pay By Bank payments involve shoppers simply scanning a QR code and automatically opening a mobile banking app to authenticate and authorise payment.

For retailers, Pay By Bank’s lower transaction fees make it especially appealing and why it is likely to cement itself as a favoured payment by the end of the 2024. Furthermore, there’s no need to clutter payment devices with third-party apps as no additional downloads for Pay by Bank to work are required. App-based, Pay By Bank can also easily be linked to loyalty schemes and tailored offers to encourage shoppers to make repeat purchases.

Digital footpaths break into the boardroom

Digital payments like Pay By Bank, smart speaker payments, and biometric authentication are creating a wealth of interconnected payments and customer data. Once solely used by customer experience (CX) teams, these digital footpaths will become mission critical in 2024, with many retail businesses leaning heavily into the insights provided. Hurried up the boardroom agenda, retailers will use these digital footpaths to identify and realise new areas of business growth – essential in today’s economic climate and as the cost-of-living crisis continues to bite for consumers. From new product offerings to launching new channels and even where to open new stores, digital footpaths will provide the most valuable insights to retailers in 2024.

Loyalty dies

Although the Bank of England expects inflation to slow, it does not believe it will be back to normal levels of around 2 percent by at least the end of 2025. Consumers will continue to feel the pinch, likely killing brand loyalty. According to research by McKinsey, around half of consumers reported switching brands in 2022, compared with only one-third in 2020. More worrying for retailers, about 90 percent said they’d keep changing. With the cost-of-living crisis set to roll on, loyalty will die as customers search for lower prices, exclusive offers, and a better CX. As a result, brands will need to double down on the personalisation of offers through insights and payment data if they are to retain customers.

Retailers cash in on data

Next year will see the retail business model flipped on its head. Building on the success of using customer data and analytics to deliver tailored and personalised experiences for their own customers, retailers will also accelerate selling access to their treasure trove of data to advertisers, suppliers, and brands. By the end of the year, reports of retailers generating up to a third of their revenue from selling data to marketers and others seeking access to consumer spending insights will emerge.

Keeping pace with change can test even the most organised and forward thinking of retailers. What was a new trend today, may not be tomorrow. However, constantly evolving, and rethinking payments is essential to help make efficiencies and savings. Crucially, to do this, retailers need to seek the right partners to help them focus on the specific challenges that lie ahead for their business and how they can best adapt to be in a stronger position.

From a better CX to the identification of new markets and opportunities for growth as well as a stronger cash flow, the benefits are clear. As we head into 2024 those who persevere and prepare will be best set to realise these wins and navigate the waters ahead.