What will the future of payments look like?
In the U.S. alone, mobile wallets are predicted to overtake physical cards as the most popular online payment method in the next three years. If this trend continues, we anticipate that digital wallets could make credit cards fully digital within the next decade.
In the coming year, the payments industry will be confronted with high levels of risk, intensifying regulatory scrutiny, and significant changes in global standards. The fast-changing payments industry is on the cusp of a new “decoupled era,” 1.
A cashless society refers to a state where financial transactions are not conducted with physical banknotes or coins, but rather through digital means such as electronic transfer, card payments, and mobile wallets. Countries like the Netherlands are leading the way towards this future.
In the US, mobile wallets are expected to surpass physical cards as the preferred online payment method within the next three years. If this trend continues, it's conceivable that digital wallets could transform credit cards into entirely digital entities within the near future.
By 2025, cash will be used in less than 30% of transactions globally. Card payments will still be the most popular form of payment, followed by mobile payments.
In 2050, the payments ecosystem (acquirers, PSPs, facilitators, and aggregators) will revolve around creating integrated capabilities within an ecosystem of partners to truly optimise the customer experience and deliver a seamless, personalised payments journey from awareness to purchase and long-term retention.
The Bottom Line. The global payments industry in 2024 is poised for significant transformation. The rise of digital currencies, advancements in AI, and the proliferation of mobile payment platforms are all expected to rejig the landscape by some stretch.
As people move toward more electronic or digital forms of payment, it might seem like paper money is on its way toward obsolescence. But experts say that cash will always be around.
Physical currency isn't becoming obsolete any time soon, so it's important to weigh up your options before deciding to go fully cashless in 2024. Ensuring you can accept some cashless payments though, is essential to keeping with today's trends and customer expectations.
We have been issuing banknotes for over 300 years and make sure the banknotes we all use are of high quality. While the future demand for cash is uncertain, it is unlikely that cash will die out any time soon.
What is the fastest growing payment method?
4. Buy now, pay later (BNPL) is now the fastest-growing payment method.
Additionally, contactless digital payments rely on NFC and magnetic secure transmission (MST) technology. NFC technology enables a connection between two electronic devices over a small distance. It enables consumers to pay with their mobile wallets via tablets, smartphones, or smartwatches.
The momentum of change and innovation in the payments market has accelerated the adoption of new technology and payment rails. Real-time payments have become ingrained in the fabric of the payment landscape and have spawned new expectations and demands from businesses to their financial services providers.
Cashless Business Trend
When a store goes cashless, it stops accepting physical cash and only allows customers to pay for goods and services with a debit or credit card, or through a payment app. Credit cards are not new; they have been in use since the 1950s.
Globally, cashless payment volumes are expected to increase by more than 80% from 2020 to 2025. The pandemic was a driving force that accelerated this adoption of digital payments but technological advancements have provided us with more ways to make payments digitally.
As technology advances and consumer preferences shift, the future of money seems to be rooted in the realm of digital and instant transactions. At Worldline, we think that adapting to new forms of digital payment and embracing the advantages they offer, will be essential to thriving in the digital economy.
We may not be a cashless society by 2060, much less by 2030. But the fact is we're closer to becoming a nearly cashless society every day. The transition from a mostly cash to nearly cashless society didn't happen overnight.
Although paper-based currencies are becoming less popular, they will likely stick around for the foreseeable future. Dollars and cents may become harder to use, but as with many obsolete technologies, there are enough users to ensure demand doesn't disappear completely.
The last five years of growth in the global payments industry has been propelled by the ongoing cash-to-non-cash conversion, a rise in non-transaction revenue such as deposit-related income, the accelerated adoption of digital commerce, and the expanding implementation of modern payments infrastructure.
Our outlook for the new year is “2024”: 2% growth, 0 recessions, 2% inflation and 4% unemployment.
What trends will shape consumer payments in 2024?
Declining Cash Payments
McKinsey's 2023 Global Payments Report indicated a nearly 4 percentage point decline in cash usage last year worldwide. The slow shift away from cash usage is expected to continue in 2024, as consumers opt for more efficient and convenient digital payment alternatives.
Fitch revised its annual real consumer spending forecast for 2024 upward to 1.3% from 0.6%, reflecting the ongoing willingness and ability of consumers to draw down buffers of excess savings, which will likely support spending well into 2024.
Commonwealth Bank, ANZ, NAB and Westpac all confirmed on Friday that there are no current plans to go cashless. This comes after Macquarie Bank announced it would phase out cash and cheque services across all its banking and wealth management products from January to November 2024.
Cash remains essential to millions of Americans who don't have bank accounts. Plus, digital payment systems are linked to your identity. Eliminating cash would mean giving up some of our financial privacy, as the government and data-hungry companies could more easily snoop on our daily lives.
The future of paper money is an interesting topic to consider. While it is true that we are living in a digital age where cashless transactions are becoming more prevalent, it is unlikely that paper money will become completely obsolete like vinyl records did. Here are a few reasons why: 1.
