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By Vukosi Maluleke

Digital Journalist

Payment trends to watch in 2024 and beyond

'A virtual economy seems inevitable' - expert

Jessie J might’ve been really on the money when she lyrically told us to forget about the ‘cha-ching, cha-ching’ more than a decade ago.

Fast-forward to 2023, and she was right – coins are no longer a payment option when clearing that price tag.

Thanks to digital advancements, paying for goods and services has become much easier and seamless.

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Nedbank Retail’s Executive of Emerging Innovation, Chipo Mushwana, acknowledged the extraordinary shift in payment options over the last 10 years.

“Today, the payments industry is a comprehensive ecosystem of financial and lifestyle services and a network of connectivity and data exchange,” she said.

‘Super app

Super apps have disrupted traditional retail models and reshaped the world’s banking financial systems by offering a platform for consumers and merchants to exchange services and financial tools.

Mushwana said that super apps present a seamless payment experience by integrating various lifestyle and financial services with in-app payment functionalities.

“Most of these apps make transactions as simple as a swipe or tap, allowing them to quickly contribute to financial inclusion, break down barriers, and reduce friction in ways that traditional banking processes have been trying to do for years,” she said.

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Embedded finance

The expert believes embedded finance will transform international financial markets in the coming years.

“By conveniently integrating financial services into non-financial platforms, embedded finance technology is set to usher in dynamic new integrated business models that seamlessly bring together every aspect of consumers’ lives,” Mushwana explained.

She said the trend was already attracting significant interest from many businesses and industries, including retail and telecoms.

Rise of e-commerce

According to the expert, the rapid rise of e-commerce as the “new business norm” is set to shape payments.

Mushwana said predictions indicate that e-commerce could result in a universal digital identity verification service that could revolutionise how data and personal identity are perceived.

“The ultimate goal of organisations embracing this e-commerce trend is to build a seamless and secure customer experience…,” she said.

Gig economy growth

According to Statista, the gig economy could yield transaction volumes of around US$455 billion (R8,9 trillion) by the start of 2024.

“Most of these will be innovative payment solutions designed to cater to unique needs of gig economy participants who require quick payments and effective platforms through which to process largely fragmented and irregular income flows,” Mushwana said.

She also said the creator economy was driving the unbundling of large platforms, with specialised payment providers “emerging to serve new categories of earners.”

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Digital wallets

Boku’s 2021 mobile wallet report predicts there’ll be 4.8 billion digital wallet users by 2025.

Mushwana said the figure translates to $12 trillion (R 234,64 trillion) in transactions by 2026.

“While digital wallets may have originated as substitutes for physical wallets, their potential as convenient transactional vehicles and value stores has seen them evolve into smart, integrated, full-function financial platforms that are changing the way people and businesses interact,” she explained.

Demand for real-time payments

Demand for real-time payments is also expected to increase rapidly in the upcoming years, with Verified Market Research (VMR) anticipating a compound annual growth rate (CAGR) of over 30% between 2024 and 2030.

“Whether it’s businesses making cross-border payments or workers sending remittances to love ones in other countries, the ability of real-time payments to provide instant access to funds and seamless end-to-end communication will see them increasingly becoming pivotal in shaping the future financial landscape,” said Mushwana.

Use of wearables in payments

The payments expert believes the use of wearables for payments would top all the trends.

“From connected cars to wearables, the devices we use daily are rapidly becoming our new payment platforms,” Mushwana said.

She further said that wearables had become an acceptable payment method.

“It’s estimated that by 2030, around 95% of new vehicles sold will be digitally connected, presenting a massive opportunity for financial services and other industries to integrate and innovate,” she explained.

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Virtual worlds and augmented reality

 Mushwana said revenue generated through virtual worlds and augmented was expected to reach $390 billion by 2025.

“As we move rapidly towards wide scale acceptance of the metaverse, the evolution of a second, entirely virtual economy seems inevitable,” she explained.

She said virtual worlds and augmented realities were fast becoming part of mainstream lifestyles, presenting endless opportunities.

“The opportunities for transforming these online spaces into transactional environments are infinite,” Mushwana said.

“A new era of financial services is upon us – and payments are leading the way,” she concluded.

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