What Kind of Payment Modernization Can You Expect in 2024?

Technology has transformed life as we know it, and customers expect the same seamless modernized experience in the payment landscape. According to the statistics, the Digital Payments market is projected to reach US$11.55tn in 2024 with an annual growth rate (CAGR 2024-2028) of 9.52%, resulting in a projected total amount of US$16.62tn by 2028. This evolution necessitates merchants proactively engaging with customers, paving the way for a more customer-centric payment landscape.

This blog will discuss five trends for treasury and payments executives to keep top-of-mind while working on the payment system. 

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Build Core Strength

Fintech must work to consolidate their account structures to increase operational efficiencies. Treasurers should gain real-time visibility into where cash sits across the globe to leverage multibank reporting, APIs (Application Program Interface) and H2H (host-to-host) solutions. It helps to gain opportunities to enhance their cash conversion cycle and incorporate corporate solutions like cross-currency sweeps.

For instance, virtual account management allows a single account to serve as dozens (or more) accounts with virtual sub-ledgers. Treasurers can free cash by instantly moving it around these sub-ledgers, which is not otherwise possible for multiple accounts. Alternatively, with a multi-currency notional pool, the treasurer can draw payments in any desired currency. It reduces FX (foreign exchange) costs and allows working capital.

Fortified Payments

Fintech owns valuable data related to its businesses and clients. Treasurers should use this data to fortify payments through investments and reduce both traditional and other risks. Implementing fraud controls to protect against their business's unique sensitivities and using proper encryption and tokenization mitigates cyber risks in payment transactions and validates services. 

Embrace Artificial Intelligence

AI (Artificial Intelligence) is also slated to remain a dominant topic in the payment landscape in 2024. Fintech leaders should work on both short-term and long-term core banking solutions opportunities to see how their payment system can help them bring ease to life.  

AI presents many opportunities for treasurers:

• Use automated systems to create insights, such as in cashflow forecasting
• Enable virtual assistants to support payment-related dispute resolution
• Forecast market trends to optimize investments
• Provide customers with personalized financial planning suggestions and services
• Enhanced fraud detection capabilities

Omnichannel Banking

As consumers increasingly demand modernized payment experiences, Fintech implements omnichannel banking. It has brought commerce evolution, where businesses accommodate what has become consumers' needs and expectations. Treasurers should work on innovative digital banking solutions and understand how payments will power these new experiences and business models. These solutions should support safe and efficient payment methods for e-commerce. 

• Streamlined payments, automated financial management, and alternative lending
• API protection from unauthorized access and transactions to safeguard financial stability
• Access to capital seamlessly and maintain healthy cash flow 
• Support tap-to-pay and biometrics
• Use of mobile wallets, contactless payments, and fraud prevention tools

Embedded Banking

Payment systems must incorporate embedded banking so businesses can seamlessly weave payments and account services into their platforms to enhance customer experience and drive new revenue opportunities. These payment modernization techniques introduce business model considerations like third-party or client money management.

• Businesses and consumers should access their funds faster, efficiently execute financial transactions, and receive exclusive rewards
• Easy compliance with rules and regulations
• Integrate new local payment methods for the impacts on these systems

Conclusion

From technical training for new programs to driving analytical thinking, investing in digital convenience is a core success factor for an organisation to maximise the value of the modern environment. With consumers having more payment options than ever before, Fintech leaders need to adapt to the modernised payment landscape. Providing these payment options while eliminating friction should be a top priority for the Fintech industry. PureSoftware Arttha delivers on this requirement by being a genuinely modern, flexible, and microservices-based core banking platform. It offers services such as virtual banking, mobile wallets, digital customer Onboarding, agent banking, and micro-lending.