Top 3 payment predictions for 2023
2022 was a rollercoaster for businesses and consumers alike. In what I think we all predicted would be 12 months to recover and find our bearings, we found ourselves in a cost-of-living crisis that we’re still very much in the grasp of.
As we tackle a downturn in the economy and look for cost-cutting opportunities this will hopefully be the year of stability and maybe even growth, for many of us.
While there are several topics that will likely dominate the next 12 months (open banking, crypto, cross-border payments, CBDC to name a few) I wanted to focus on 3 areas I think will have the biggest impact on merchants this year…
1. Reduction in fraud for online payments
Thanks to the adoption of 3DS2 protocols from last year, we’re already seeing a huge reduction in fraud for online payments. Most consumers will have already noticed an extra step when buying online, such as approving the payment via their online banking app. This extra layer of security is a huge step forward in fighting online fraud.
The next step now? Making these payment flows as frictionless as possible.
In some cases consumers are still getting used to this extra step, which can lead to higher levels of abandonment. This will inevitably reduce over time, as flows continue to improve and consumers simply get used to this update when buying online.
This year merchants and payment players need to work together to ensure they’re offering the best payment flows for consumers, with a focus on minimising friction and keeping checkout abandonment as low as possible.
2. Buy Now Pay Later usage to soar
A Forbes article from the end of 2022, stated that 70% of BNPL users are now using this means of paying due to the cost-of-living crisis. With flexible payment options and interest-free credits it’s not a huge surprise that many consumers are turning to this solution for help. With the controversial addition of Klarna to Deliveroo only a few months ago, it’s clear that BNPL is no longer a payment method solely for the retail space.
While it may not work for every business, consider how BNPL options could support your customers through the coming months.
3. A rise in payment orchestration
Payment orchestration platforms have made a steady rise over the past couple of years and I predict an even greater growth in ‘23. Unlike a typical payment player, orchestrators give access to multiple payment providers, acquirers, fraud management tools etc. through a simplified integration.
A lot of merchants prefer to work with multiple providers - orchestrators offer just that. Merchants can benefit from multiple connections in a single platform and instead shift their focus to maximising conversions and keeping their costs low.
For merchants focusing on stability, simplification and cost-cutting initiatives this year, a payment orchestrator will be a wise move to consider in the coming months.
Get more from your payment provider in 2023
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