An Overview of Payment Trends In 2024
  • article
02/01/2024

An Overview of Payment Trends in 2024

Dorota Jasińska

Content Specialist

Maximilien Kraczkowski

Business Development Manager

In recent years, the evolution of payment methods has been noticeable and significantly impacted our payment habits. We’ve noticed a shift in traditional payment methods to convenient, easy, and contactless payments that was strongly influenced by the breakdown of COVID-19. The pandemic accelerated the development of contactless, digital, and instant transactions. The new approach to payments has stayed with us and keeps evolving faster than ever.

A2A payments

Account-to-account payments have gained popularity in everyday transactions. With the rise of open banking, this payment method is gaining momentum as an alternative to using cards. A2A payments skip the additional steps in payments and allow for an easy, fast, and direct transfer of funds from one account to another. In some countries, this payment method is widely used as it allows for simple, instant payments wherever needed – in eCommerce, regular shops, or for personal uses. They are especially popular in, just to name a few, the Netherlands (iDEAL), Poland (BLIK), India (UPI), and Brazil (PIX).

A2A payments will continue to gain popularity because of low cost, speed, and convenience. They’re cheaper than card acceptance fees, so implementing A2A payments will benefit merchants. They’re also faster because they allow for real-time payments. There’s no need to wait for the transaction to be processed by the bank, like card payments. They’re also simple to implement in bank apps and easy to use.

According to Fintech Magazine, 75% of payment service providers and independent software vendors plan to implement open banking within the next two years, including A2A transfers. These are being implemented in many stores worldwide, and Neontri introduced BLIK to one of Poland’s sporting goods market leaders.

BLIK allows for a quick payment using a code and confirmation in the banking app without having to log into the bank. No extra steps are required, just a phone with a mobile banking app that uses BLIK. This payment method is used for in-store and online purchases, real-time transactions, such as quick transfers to a friend’s account using their phone number, or ATM withdrawals without a card. BLIK provides every user with a time-limited code attributed to a user. In Q2 of 2023, as many as 15 million phone numbers were registered to receive a BLIK transfer, and the number of everyday transactions was close to 5 million.

Buy Now Pay Later

Another payment method that’s gaining popularity and will continue to spread among customers, especially the young ones, is Buy Now Pay Later (BNPL). ECommerce customers have embraced this payment option because it enables them to make purchases and defer payments without extra fees. This way, they can obtain products and decide whether to return or keep them with a deferred or split payment option.

The rising popularity of this flexible payment method has led to the broad implementation of services such as Klarna, Afterpay, PayPal Credit, etc., into eCommerce. People willingly use the possibility of splitting payments for their shopping without the need to pay interest rates or processing fees. This option has become very popular primarily due to the economic situation around the world, as many countries struggle with inflation. Customers turn to split payments and pay for their purchases in convenient installments.

According to BNPL statistics, in the future, people will replace credit cards with BNPL. Customers prefer BNPL to credit cards because it’s easier to make purchases using split payments. This payment option is also more flexible and cheaper (often with no interest fees) and offers a streamlined approval process.

In 2023, Klarna experienced significant growth in the European markets. Its year-over-year gross merchandise value increased along with the demand for the service also in the US. The company announced AI-based solutions for eCommerce that can influence its further growth in the US. Looking at the popularity of the Klarna app, which is one of the top BNPL provider apps on the US market, the demand for their services is undeniable.

Klarna offered a solution for a considerable percentage of cart abandonment by providing a flexible repayment plan. This is why it’s being implemented by more and more merchants all over the world. The company announced its expectations for the last quarter of 2023 to be record-breaking in terms of shopping spending due to the holiday season.

Digital and mobile wallets

The switch to cashless payments is a fact, and now we can choose among many payment methods that enable such transactions. The growth of the use of digital payment methods is visible, and a new study from Juniper Research shows that by 2024, half of the world’s population will use digital wallets. Digital wallets are secure electronic tools used for transactions. There are many applications that offer digital wallet services, such as Apple Pay, Google Pay, or PayPal. Each enables you to safely store payment details, like credit or debit card information.

Forbes Advisor checked why people use digital wallets, and 40% of respondents pointed out their convenience when making purchases. This payment option is so important to customers that 55% of respondents claimed they would stop shopping with a merchant who doesn’t accept digital wallets. This gives us a glimpse of how people approach the possibility of cashless and convenient payments at merchants.

While card payments are still prevalent, digital wallets are becoming widely present in our lives because of the use of smartphones by most of society. People turn to convenient solutions, including having NFC payments on their phones or watches with instant prompts about their transactions.

Venmo, the leading mobile money transfer company owned by PayPal, has over 62.9 million active users with a yearly growth rate of 29%. It’s available only in the US, and the numbers represent 22.3% of the total US population. The digital wallet is widely used to pay for various products and services using one’s mobile device.

The growth of digital payment methods in 2024

Digital payments are already omnipresent in today’s world, and they keep evolving. Slowly, they will dominate the payment market. Consumers embrace different digital payment methods every day, and the number of people using digital wallets, BNPL, or A2A payments is increasing. Nowadays, we can pay by phone, QR code, biometrics, or deferred payment, and we didn’t have such options only a few years ago. Digital payment methods still have much to offer as they cooperate with AI technology and open banking, a gateway to even more consumer-centric solutions.

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