The current payments experience landscape is nearly unrecognisable from what it was a few years ago. Powered by a wave of emerging PayTech trends, consumer expectations for financial transactions have completely transformed in recent years— the demand now is for convenience, cost-effectiveness, speed, and security above all, not just from financial institutions but businesses as well.
In Asia, the future is PayTech
Asia has been leading the charge in this revolution, innovating quickly with a customer-centric approach and cutting-edge technology. Southeast Asia, in particular, presents huge untapped potential for PayTech— as of 2021, it holds the mantle as the fastest-growing region in the world for mobile wallets, with over 400 million active users expected by 2025, a whopping 311% increase from 2020 levels.
Driven by an increasing consumer appetite for digital payments and contactless transactions, businesses are seeing the urgency to embrace new PayTech trends in order to meet customer demands. In 2021, approximately 63% of consumers are more likely to shop at a retailer if it accepts their preferred digital payment method, and 73% want to be able to pay via the same channels, regardless of whether they’re shopping online or in-store.
But which emerging tech trends, from blockchain to AI, open banking, and decentralised finance, should leaders be adopting to optimise their payments experience and ensure readiness to meet the expectations of tomorrow’s customers?
Consumers will not accept anything less than seamless and secure experiences
Customers are demanding cheaper, more efficient, and more secure payments experiences. Providing seamless, hassle-free payments is now a cornerstone of customer experience—but it’s not just about convenience. Consumers also regard security and data privacy standards as non-negotiables when choosing which businesses to deal with.
In a 2022 study, 44% of customers stated that security is the primary concern when choosing an online payment method, and 80% hold businesses responsible for taking the necessary precautions to protect them from fraud and identity theft.
Similarly, 82% have expressed that they are willing to share more personal and financial data if it results in a more frictionless payment experience.
Customer priorities are clear: seamlessness and security are vital to their financial transactions, whether it’s digital wallet payments, e-commerce checkouts, or cross-border peer-to-peer (P2P) money transfers. While consumers seek convenience, they are not willing to compromise on value, reliability, transparency or the assurance that their transactions will be processed responsibly and with the strictest compliance to regulations.
Which PayTech trends are impacting customer experiences the most?
Digital wallet adoption has skyrocketed in recent years, propelled largely by the boom in Asia’s e-commerce and gaming scenes, and the need for contactless payments necessitated by the pandemic. This primary trend set into motion a slew of PayTech innovation trends, including the rapid growth and adoption of biometric authentication, IoT payments, cryptocurrencies, neobanks and fintechs, and “super apps” with embedded QR code-based payments.
The rise of super apps, in particular, is the main motivation for 75% of Southeast Asia’s consumers to adopt digital wallets by 2026 when polled in 2022. Inflationary pressures, high interest rates, and poor inclusion by traditional banks are incentivising the region’s shoppers to turn to digital wallet vendors for better value—think attractive rebates, fuss-free buy now pay later (BNPL) offers, and merchant-exclusive discounts.
Additionally, a burgeoning interest in the metaverse is also spurring demand for virtual currencies, blockchain technologies, and digital identity verification. This will reshape the way payments integrate digital wallets and decentralised finance. For businesses looking to capitalise on the future metaverse economy, PayTech solutions that facilitate secure and cost-effective transactions will become crucial to success.
Prepare today to meet the demands of tomorrow’s customers
As retail businesses and financial service providers look to build trust and reliability into their payments experience, communication will be key. Instant, personalised and secure two-way communications are crucial to establishing strong customer relationships, especially when it comes to prompt resolution of service issues, demonstrating transparency, and ensuring the security of transactions through enhanced verification.
Tonik, the first neobank in the Philippines, recognised the importance of this early on in their growth strategy and leveraged the power of 8×8 Communication APIs to help it scale quickly and securely across the country. Global gaming marketplace Codashop, run by Coda Payments, similarly turned to 8×8’s communication solutions to help secure their payment methods from fraud, while improving the customer experience and streamlining time-consuming processes.
Building a better payment experience is essential to growth
The future of payments is digital. Staying ahead of PayTech trends allows businesses to not only deliver superior payment experiences that exceed customer expectations, but also gives them a competitive edge in an increasingly complex market.
