The Future of Payments: Key Trends to Watch for in 2024

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The digital payments industry is constantly transforming to meet the needs of banks and customers. Its convenience, speed, and security have changed how customers transact, interact with banks, and use their finances.

As per a recent report by Statista, “Digital Payments – Worldwide“,

•	Total transaction value in the Digital Payments market is projected to reach USD 11.55 trillion in 2024.
•	Total transaction value is expected to show an annual growth rate (CAGR 2024-2028) of 9.52%, resulting in a projected total amount of USS 16.62 trillion by 2028.

The payment landscape has never been more complex than it is today. In 2024, it continues to evolve with new capabilities, so banks must stay current on future trends to drive revenue and provide the best customer experience possible.

Here are five key payment trends to watch for in 2024. 

  1. New Iteration of Payment Card Industry Data Security Standards (PCI DSS) 4.0

Banks and payment partners align with PCI DSS for guidelines to better mitigate payment data risks. PCI DSS 4.0 introduces new requirements and enhances existing ones to ensure that banks that process, store, or transmit cardholder data maintain a secure environment.

As per a recent report by Bluefin, “The State of Enterprise Readiness for PCI DSS 4.0,”

•	94% of respondents have significant or very significant concerns about payment data security.
•	21% say they are very confident in protecting customer data today.

PCI DSS 4.0 will focus more on authentication, particularly in tech upgrades such as multi-factor authentication (MFA). Another aspect is its approach to risk management and prioritizing its mitigation efforts according to the level of risk it poses to cardholder data.

Bluefin’s report also states that,

•	93% of respondents indicate that the changes required by PCI DSS 4.0 are significant

In 2024, PCI DSS 4.0 will continue to provide a more robust and adaptable framework for securing payment data. It will encourage banks to adopt a proactive and flexible approach to security, respond to new challenges, and effectively protect consumer data in an increasingly digital world.

Also read: The Benefits of B2B Digital Payments

  1. SuperApps: One Stop Shop

A super app is a platform that is available on mobile or web. It combines multiple services into one application. These platforms are also known as multi-service tech platforms.

Customers can perform several tasks with a super app without switching between separate apps. Each feature of the app could be a standalone application on its own.

Super apps offer essential services like account creation, fund transfers, and bill payments without physical banking. They facilitate digital payments through digital wallets and seamless merchant integration, promoting cashless transactions.

Additionally, they help users cultivate good financial habits and open up investment opportunities in mutual funds and digital assets, regardless of the user’s experience level.

In 2024, Super apps will eliminate the need for multiple platforms, making financial tasks more efficient and streamlined. All the user has to do is tap a few buttons on their smartphone to access these features.

  1. The Rise in Biometrics

Security measures to protect user data and transactions are also maturing with the evolving payment landscape. Biometrics like fingerprint and facial recognition are used to secure digital transactions.

These advances provide an extra layer of protection, making digital payments convenient and highly secure. In 2024, banks will continue to invest in tight security measures to secure customer data and protect against cyber threats.

Moreover, regulatory frameworks and open banking initiatives promote greater transparency, competition, and bank data sharing. Compliance with these regulations is crucial to maintain integrity, trust, consumer interests in the financial ecosystem.

  1. Increased Adoption of Tap to Pay and Peer to Peer (P2P) Payments

Contactless payments allow customers to simply tap to pay using a contactless credit card or payment-enabled device. A contactless credit card uses RFID tech and comes with integrated chips.

Moreover, credit cards connected to smartphones or smartwatches offer an alternative contactless payment using the same tech. For instance, Apple Pay securely saves personal information and credit card numbers on an iPhone or Apple Watch. It allows users to tap and go without using credit cards.

Similarly, P2P payment systems are expected to change how people exchange funds. These platforms allow users to send and receive money directly to another person’s account from their mobile devices without needing cash or cheques.

Furthermore, integrating Blockchain and AI in P2P payments could further enhance security, prevent fraud, and personalize the user experience. For example, Blockchain’s decentralized nature can provide more security and transparency for transactions. AI can be used to detect and prevent fraudulent activities in real-time.

As per a recent report by Capgemini, “WORLD PAYMENTS REPORT 2023,” by 2027

•	Noncash transaction volumes are expected to reach about 2.3 trillion, doubling since 2022.
•	New payment methods will make up around 28% of the total volume. 
•	The share of traditional payments will drop to nearly 72% of overall noncash transaction volumes.

In 2024, the digital payments ecosystem will continue to undergo significant changes, with Tap to Pay and P2P at the forefront. These payment methods will offer seamless integration with banking apps, enhanced security measures, and the ability to conduct global transfers easily.

  1. GenAI’s Bad Cousion will Target the Financial Services 

As per a report by McKinsey, “Capturing the full value of generative AI in banking,”

•	Banking is expected to have one of the largest GenAI opportunities among industry sectors.
•	An annual potential of USD 200 billion to USD 340 billion, mainly from increased productivity.

Gen AI’s potential to redefine financial services is massive. However, the dark side of the tech is that it is being used to disrupt services and steal data.

The rise of FraudGPT and WormGPT has allowed hackers to use LLMs to write malicious code and design highly targeted phishing emails. Gen AI tools can craft legitimate communications from trusted entities, making it harder for individuals to recognize fraudulent attempts.

In 2024, hackers can use LLMs to accelerate the efficiency and effectiveness of numerous fraudulent attacks. The emergence of synthetic identities could also be elevated by GenAI, improving hackers’ ability to go undetected through identity verification screening processes.

Recent advances in fraud prevention tech have used GenAI, which is being used to target hackers using the same tech to their advantage. Most fraud-prevention vendors are expected to have a GenAI strategy by 2024.

Conclusion

The new era of financial services is here! The payment landscape in 2024 will continue to witness a transformation. These changes will be driven new security standards, super apps, biometric security, and tap to pay and P2P payment solutions. These trends highlight the importance of technological innovation, regulatory adaptation, and strategic planning for banks aiming to remain competitive and secure in the rapidly evolving financial landscape.

Check Out The New TalkFintech Podcast. For more such updates follow us on Google News TalkFintech News.

Apoorva Kasam
Apoorva Kasam
Apoorva Kasam is a Global News Correspondent with TalkCMO. She has done her master's in Bioinformatics and has 18 months of experience in clinical and preclinical data management. She is a content-writing enthusiast, and this is her first stint writing articles on business technology. She specializes in marketing technology, data-driven marketing. Her ideal and digestible writing style displays the current trends, efficiencies, challenges, and relevant mitigation strategies businesses can look forward to. She is looking forward to exploring more technology insights in-depth.

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