ENABLING BUSINESS:

How Payments Technology will Boost Businesses’ Futures

As the year has progressed, we’ve seen many of the predictions made at the beginning of 2023 begin to come to fruition. Trends around open banking were solidified when the new finance tech hit a milestone of 7 million users in the UK last month, and more compelling news on instant payments continues to stream through, as the number of instant payment transactions in Western Europe is now expected to grow 5-fold by 2027.

Although it’s great to see the continued growth of these innovative payments technologies, there’s a lack of focus on how new technology is impacting business for the better both now and in the short term. Between open banking, the metaverse, instant payments, and Central Bank Digital Currencies (CBDCs), there’s a lot going on in the payments space, but what are the genuine areas that will see the most development in paytech and how will they affect business?

Accelerating B2B Payments

As digital payments continue to grow in popularity among consumers, businesses have also demonstrated increased adoption to streamline business payments. Digital payment solutions are revolutionising the world of B2B payments, catering to businesses’ needs in a space that has been relatively neglected when it comes to innovation.

As businesses look for new ways to save costs and introduce efficiencies, there’s a renewed focus on eliminating manual intensive tasks, one of which is slow and lengthy invoicing processes. As a result, businesses are looking to technology to address these issues. This means that payments providers who can offer digital payments will be in high demand.

The end advantage of these more streamlined B2B payments processes is efficiency. Businesses won’t get bogged down in making sure that their affiliates, providers and suppliers are paid properly, allowing day-to-day operations to run smoothly and granting more time to focus on more crucial matters.

Making Real-Time a Reality

The ways in which businesses move and receive money digitally is becoming outdated. Businesses are realising that these processes are also expensive, slow and leave their customers, as well as themselves, more vulnerable to fraud.

In light of this, instant payments have seen huge investment and support from Big Tech, in addition to becoming embedded into non-financial apps and other digital services. As open banking and other real-time payment options develop, 2023 will be an exciting year for digitisation opportunities, including at point of sale and in B2B.

Indeed, as I touched upon earlier, open banking and other instant payment technology has already reached new milestones this year, and so businesses can start to expect a much wider variety of real-time payments options to become available. The benefits of this will be game-changing for many SMEs, allowing payments to be complete in a matter of seconds, greatly improving efficiency and reducing the risk of fraud.

The Physical and Digital Become One

2023 is seeing the physical and digital spaces complete their merger into omnichannel, meaning that consumers will cease to view the virtual and physical worlds as separate, but rather two spaces that flow seamlessly between one another. This marks a huge opportunity for many companies to capitalise upon.

Stadiums and events, for example, are primed to adopt more digital ways of engaging with fans, branching out beyond simply offering virtual tickets, but enabling the whole payments experience at events to run digitally, e.g., ticketing, merchandise, food and beverage and even parking. Another hybrid area to watch is social commerce, where consumers can immediately buy what they see without leaving an app or platform, reducing the steps to purchase significantly.

Disciplined posture toward new technologies will prevail

Though efforts to create dramatic advances in technology will always receive attention, higher interest rates and the crypto crash–among other factors–are forcing a more disciplined posture toward new technologies in 2023.

We can take the metaverse for example. Commerce opportunities in the metaverse depend on whether consumers will flock to digital worlds or if uptake will have a longer runway. As large improvements continue to take place, companies will likely view the metaverse as an extension of their ecommerce strategy, however we may not see a single large-scale rush towards it.

Similarly, we’re likely to see more regulation of Buy Now Pay Later (BPNL) to stabilise and protect consumers. What’s more, it’s fair to say that successes in crypto will occur via effective use cases. For example, stablecoins, blockchain technology and CBDCs are more probable winners in the near term because there are real use cases where they can be put to work on a regulated, reputable and compliant basis.

Ultimately, the market’s continued trajectory down this cautious route regarding furthering innovation, in addition to enhanced efficiency-boosting paytech in both the B2B and B2C spaces, spells good news for businesses, and should encourage them to invest in bringing their payments infrastructure up to date for the benefit of both themselves, and their customers. All these factors are enabling businesses to increase their competitive edge and improve customer loyalty by providing safer, more streamlined and positive payment experiences.