Published by Jessica Weisman-Pitts
Posted on December 7, 2022
4 min readLast updated: February 2, 2026
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By Jon Horddal, Group Chief Product Officer at emerchantpay
Over the last few years, payments innovation has accelerated at an incredible pace and 2023 promises to be no different. As the world contends with never-before-seen social and economic challenges, merchants must adapt and ensure they are well prepared for what’s to come.
Here are the top four payments trends businesses can expect in the coming year:
Multiple regulatory authorities are stepping up payment regulation requirements. Understanding these requirements and ensuring adequate compliance will be one of the biggest challenges for merchants in the coming year, especially those with global ambitions, due to the difficulty of meeting different needs across multiple jurisdictions.
In particular, regulatory bodies are increasingly necessitating localisation. For example, the Bank of India now stipulates that all domestic payments are to be processed locally by merchants and that all payments-related data must be stored on Indian servers. In cases where data is processed outside the country, it needs to be deleted from servers abroad and brought back to India within 24 hours. This means that merchants must have access to local infrastructure in place in order to process payments in India. Payment Service Providers (PSPs) are crucial partners for merchants operating in India to facilitate their payments.
Equally, PSPs must stay abreast of regulatory updates and changes, to help merchants ensure they have the right measures in place timely.
In 2023, alternative payment methods are set to rise in popularity and adoption.
We are already seeing these payment methods overtake card payments in countries such as India, where the introduction of Unified Payments Interface (UPI), developed by the National Payments Corporation of India, has enabled funds to be transferred instantly from one bank account to another via mobile devices. Similarly, in Brazil, PIX allows instant payment transfers to be made from the payer’s account to the recipient’s.
What’s more, 70% of online shoppers are more likely to complete a cross-border purchase when their payment method of choice is available. It’s important for merchants to ensure they integrate their target customers’ preferred payment methods to maximise conversions.
Levels of fraud increased during the pandemic and as global economies are stepping into recession, it’s likely that it will continue to be a concern, with the need for enhanced anti-fraud solutions becoming all the more apparent.
PSPs must stay attuned to changes both in terms of the developing threat and the security measures needed to mitigate them, ensuring they have the right tools, insight, software and solutions in place.
A good measure to tackle fraud is the implementation of 3DS2 which aims to reduce fraud by enforcing an additional layer of security at the checkout for shoppers using payment cards. As of March 2022, Strong Customer Authentication (SCA) rules became mandatory in the UK – a key component of which is the two-factor authentication facilitated by 3DS2. Card schemes have gradually phased out support for 3DS2’s predecessor, 3DS1, and will continue to do so moving into 2023.
Another example is the implementation of scheme-based tokenisation, which offers a more secure way to transfer card details between the card payment players.
Although Buy Now Pay Later (BNPL) has recently received negative publicity in the US and the UK, in other geographies such as Germany and Latin America, this payment method has been the preferred way to pay for years. For merchants looking to grow globally, PSPs should consider adding BNPL solution into their payments portfolio, such as instalment plans, to accommodate customer demand and meet expectations.
These trends are just a few examples that will impact businesses in the coming year and beyond. In a world full of uncertainty and with the payments industry growing increasingly complex, PSPs have an essential role to play in helping merchants navigate change to safeguard success for today and for the future.
Alternative payment methods are non-traditional ways to make transactions, such as mobile wallets, cryptocurrency, and Buy Now Pay Later (BNPL) options, which provide consumers with more flexibility.
Fraud in financial transactions involves deceitful practices aimed at obtaining money or assets unlawfully, often through identity theft, phishing, or unauthorized transactions.
Compliance in finance refers to adhering to laws, regulations, and guidelines set by governing bodies to ensure ethical practices and protect consumers in financial transactions.
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