The Covid-19 pandemic forced the payments sector to undergo a makeover, spurred by new-age firms' innovative techniques, industry consolidation, and customers' demand for an end-to-end experience. As the industry crosses milestone after milsetone, it enters a new age known as Payments 4.X. Payments are now embedded and undetectable, and serve as an enabler for a frictionless consumer experience. Digital IDs are crucial for a flawless payment experience when clients permanently change next-generation payment systems.

Around 44 billion digital payments were registered in India in 2021. Large-scale interbank payments, such as Real Time Gross Settlement (RTGS) or National Electronic Funds Transfer (NEFT), and payments made by individuals, such as credit and debit cards, were included in the overall amount of digital payments. Since 2015, India's mobile payment system, Unified Payments Interface (UPI), has seen significant growth in terms of both numbers and value.

The transactional value of digital payments is expected to grow up to over 238 trillion Indian rupees in the financial year 2025 in the country.

Firms may only realize their full market potential by adopting API-based business models and open ecosystems in the new era, requiring collaboration and platformification. Data prowess and improved payment processing capabilities will be necessary to succeed in the future. Banks and traditional payment companies are racing against the clock since their competitive edge isn't guaranteed indefinitely.

Let us explore the top five payment trends emerging as imperative tools for businesses in 2022.

#1 Payments from your smartphone

Mobile payments are the de facto mode of purchase and payment for GenZ. Paper checks, cash, and even plastic payment cards will be as exotic to a future generation as 8-track music players and rotary phones were to their parents. Everything from groceries to pet care may be paid for using mobile payment technology. Although the shift to mobile will not happen immediately, the days are rapidly approaching when paying with a card will be nearly unheard of. In 2023, it is estimated that there will be 1.31 billion proximity mobile payment transaction users worldwide, up from 950 million users in 2019.

The rationale for mobile payments' rapid rise is simple: they are just more convenient. The customer does not need to transport additional luggage, and the merchant does not need to deliver your pizza with a card swiper. Mobile payment has become the final step toward a cashless society for many people. It's simple to see why most people expect mobile payments to be the inevitable king of eCommerce in an age of heightened disease awareness and a general desire to build social distance.

#2 Single-Click Payments

Many businesses, including Amazon, have come to rely on "single-click" payment options. The idea is that by storing your card and shipping information online, you will be able to pick an item and pay for it right away. There are no checkout carts or payment forms to fill out; just one click, and you're done. Payment info is automatically filled in for any subsequent purchases made by the merchant. The customer's card data is encrypted via a technique known as "tokenization" in this type of payment system. For future purchases, the token serves as the customer's identification. After that, if the buyer has already paid on the website, they can make one-click payments.

As a result, card tokenization substitutes sensitive bank card data with a unique token that allows you to make transactions online without entering your card information. Tokens are safe to use and secure. Fraudsters are unable to decipher them. The key benefit is that the customer can pay automatically on any website without directly accessing their credit card information.

#3 Contactless Payments

As the name implies, a contactless payment does not require physical touch between the buyer's smartphone or credit card and the POS. You may have also heard the term NFC which stands for "near field communication." It's a radio frequency identification technology that enables contactless payments (called RFID). NFC transactions use a specific radio frequency to allow a card or smartphone to connect with a payment scanner when they're close enough (usually 10 centimeters or less).

Magnetic-stripe cards, whose somewhat antiquated technology makes them reasonably easy to clone, implying a greater probability of identity theft and bogus charges. Contactless payments are verified, which means they're challenging to hack. The data connected with the credit card on file is encrypted and continually changing in contactless payment. As a result, even if fraudsters were to break into a system, their uncovered information would be meaningless.

Contactless payment systems have grown in popularity as a result of the pandemic. They accounted for 55% of all point-of-sale sales in Australia in 2019.

#4 Payments with Rewards

Rewards programs and loyalty points have long been utilized to enhance brand engagement and retention, but redeeming them has always been a hassle.

However, with the increased use of digital payment methods and the development of a digital ecosystem, these points can now be used to pay for a range of transactions- online and offline. This benefits the point issuers, the businesses who take the points as payment, and end-users.

The impact of rewarding payments is three-fold. The consumers will be able to redeem these points quickly, allowing them to experience a convenient getaway which will help businesses to retain a happy customer base. Businesses that accept reward points also see an increase in income and sales. In 2019, cashback rewards were the most popular, with 60% of debit card rewards participants opting for them.

#5 Buy Now/ Pay Later

Affordability options like 'Buy Now, Pay Later' have taken the e-commerce business by storm around the world and are sure to be one of the significant payments trends in 2020.

Buy Now Pay Later (BNPL) is a payment option that allows customers to purchase without paying out of pocket. In most cases, they sign up with the bussiness providing the service, and they deliver on the customer's behalf after a purchase.

However, after the lender makes a payment, the amount must be refunded within a specific time frame. The customer can pay it in one single sum, or no-cost Equated Monthly Installments (EMIs). 

These methods have evolved to become even more seamless. Today, the process takes only a few clicks and less than a minute, and clients can pay across many timelines without incurring any additional costs or charges. Companies that use such solutions get more money by utilizing previously untapped client niches.

​Salt provides businesses with a one-stop portal to manage multi-currency accounts, payments, collections, and expenses worldwide. Visit the website here, or click hereto read more about such emerging solutions and global trends in fintech and business.