Five Vital Trends In Payment Cards For 2023

Five Vital Trends In Payment Cards For 2023
Five Vital Trends In Payment Cards For 2023
Recent data have shown that the global digital payments market is now estimated to be worth more than the car manufacturing sector, and it is expected to reach $20 trillion by 2026. According to virtual payment card provider Lanistar, the recent hike of about 24% per year is influenced by a combination of technological innovation along with fluctuating spending habits among consumers.

Jeremy Baber, CEO at Lanistar, said, “Today, we are seeing a surge in demand for prepaid or eBanking debit payment cards across the globe. This change is being driven by the unbanked and underserved, as well as by younger generations, who are making an active lifestyle choice to switch to this payment card type. We are also seeing a number of key trends in the market that providers need to be aware of. In our way, while the payment card market is established and substantial, there are still opportunities for expansion”.

1. The Rise of New Generations of Consumers.

The Millennials and Gen Z present various demographic groups and they are known to have higher spending power and can impact the economy. These two generations are fronting on innovations in the digital landscape which includes digital and smart device payments and virtual cards. This combination includes increased adoption of a variety of card payment solutions, which helps financial services become more accessible than before ‘democratising’ the process through technological innovations.

Baber continued, “In today’s increasingly digital society, in which more people than ever before own a smartphone, consumers want and expect tailored financial products and services that can be accessed through a smart device. These services must be seamless and intuitive while providing the services young people need. This is a generational expectation and failure to address it will have an adverse effect on any payment provider’s business.”

2. Reaching the Unbanked and Undeserved

Bbaber explains that “Across the Global South, and even in many developed countries as well, there are high levels of unbanked and underserved consumers, mainly from younger and lower-income households. Generally, these households opt for prepaid or eBanking debit payment cards because they are inexpensive and secure, which makes them best placed to meet their financial needs. But at the moment, this is an underdeveloped market,” he continued. “These payment cards have become integral to daily life for millions, and the people who use them are often open to exploring new features on their cards – at the right price point. The increase in adoption of cards among the unbanked and underserved populations will create multiple opportunities for players operating in the global payment market – but only if they offer the right services at an affordable price point.”

3. The Gig Economy is Changing Payment Habits.

Baber said “The advent of the gig economy shows no signs of slowing down. And while the flexibility of contract work clearly offers benefits for both workers and companies alike, one of the biggest trends we have seen is the role of payment cards in guaranteeing contract workers receive timely payment for their work. Whether it’s via a physical or virtual payment card or via a payment app, the gig economy is powering a payment revolution in its own right,”

4. Apps and The Mobile-First Experience.

Conservatives have estimated that the number of smartphones on the planet is now at 7 billion which equates to ownership of mobile phones to 86% globally. This provides an easy-to-use and intuitive mobile-first experience as a priority, including the payment space.
Baber went further to describe saying “Consider Amazon, for example. This is a company that is currently shipping 1.6 Million packages every day, and in part, that’s due to just how easy their mobile platform is to navigate and use. They stock just about any item a person could need, make all the crucial information clear as day, and rarely have any hidden charges. If this model could be imposed onto a banking platform, imagine the success it could have”.

5. Balancing Transactions In The Physical and Virtual.

Although the end of physical transactions is very close due to the growth of technology and as it continues to evolve the capability of virtual transactions. The benefits of digital solutions are many, the most notable of which is the reduction of plastic waste.

According to ABI Research, the amount of plastic used annually in the production of banking cards equals that of 80 Boeing 747 planes, and the carbon footprint in this production is also equivalent to 300,000 passengers flying from New York to Sydney. Because Gen Z and Millennials are more concerned with environmental issues more than others, they find themselves providing solutions that can cushion the effect of environmental change and one of such is digital solutions.

Also, effective payment solutions must also meet up with speed, cost, and security with user experience. Customers these days require ‘anywhere service’ and payment providers must work towards their meeting this demand and make sure that these services are provided wherever customers are spending their time and money. The increase in the growth of technological development implies that the scope of ‘where’ is expanding from physical to virtual.

Baber concludes that “The real success of payments will not come from them being the focal point of our daily lives, but instead from them slipping into the background and providing invisible, embedded payment experiences. The ultimate goal has to be that the user experience of payment cards and the apps they sit on becomes so deeply integrated with a person’s day-to-day transactions that eventually they are not even conscious of it. In other words, payment providers should focus on developing and bringing to market payment solutions that aren’t just frictionless, but invisible.”