In 2024, fast-paced advancements in financial technology will reshape the world of payments. This two-part series explores key trends shaping this transformation and how your business can respond.
Collaboration or Competition: Banks and Fintechs
A noteworthy shift is taking place as traditional banks and fintech companies embrace collaboration, recognizing the value of partnership for driving innovation. In fact, 86% of industry players now acknowledge this shift, understanding the unique strengths that each brings to the table.
In 2024, alliances and partnerships will flourish as more and more businesses look for opportunities to expand their market share, grow their user base, and scale their business.
These strategic associations are expected to deliver a significant boost to organizations that need to adapt and upgrade their platforms to stay competitive.
So, what does the future of collaboration look like? There's no doubt we are at a point where payments will become integrated into every aspect of our daily lives. We already see payments, lending, and banking leading the charge of the embedded finance trend. However, expect to see embedded insurance, tax, and accounting expand in the coming year.
Payment trends and customer demands are moving fast. The only way to keep pace with it will be to create a solid solution through partnerships.
There's More to Come with AI Payments
Artificial Intelligence (AI) is playing an increasingly important role in the evolving payment landscape. Payment companies have been utilizing AI for some time now, but as technology advances, so does the potential of AI to revolutionize digital transactions.
The integration of AI tools into payment processing offers numerous advantages. Automation is the name of the game. By automating the repetitive tasks involved in payment processing, you reduce the time spent on these tasks and eliminate the errors they often come with.
Today, we already have intelligent payment API technology that can automate data entry, reconciliation, and reporting. As generative AI technology continues to grow in payments, guaranteed it will be the CFO that is about to gain the biggest benefit.
Once you can easily process and extract essential information from large financial documents like annual reports and financial statements, the insights gained for strategic decision-making will prove invaluable.
From enhanced efficiency to identifying new opportunities and managing risks effectively, expect the entire financial operation to be able to deliver some of the best results yet.
Financial Data Security
In an environment where cybercrime is on the rise. 2024 will be the year every business, large or small, will invest in technology that can help them mitigate risk and protect their financial data.
To safeguard their financial operation, organizations will deploy payment processing solutions equipped with advanced encryption technologies, tokenization, and advanced capabilities that will help them detect fraud.
Every organization will look to know, understand and implement protocols around financial regulatory compliance, onboarding, KYC, transaction monitoring, fraud detection, anti-money laundering, bank account validation, and tokenization. While some companies will choose to navigate the complexities in-house, others will outsource them to a third-party payment provider with specialist expertise.
Threats will continue to adapt with the times, so security features like these will be critical for safeguarding sensitive data, securing assets, and ensuring the integrity of digital transactions in 2024 and beyond.
Alternative Payment Methods Will Give Credit Cards a Run For Their Money
What are alternative payment solutions?
Alternative payment solutions are nontraditional methods of payment that allow customers to manage and spend money without the need for physical cash or cards.
In today's financial environment, understanding the cost-benefit dynamics of various payment methods is vital for business competitiveness. This is why digital wallets and bank account payments are gaining traction as an alternative to credit cards.
Bank account payments offer a more cost-effective and technologically advanced approach when it comes to payment processing. These developments, coupled with recent changes like Visa's surcharge cap reduction, are prompting a shift from traditional credit card reliance to more flexible alternatives.
Instant Payments Will Deliver Easier Money Movement
As of 2023, more than 79 countries have embraced Real-time payment solutions. With payments moving away from traditional methods tied to batch and files and toward API connectivity, the potential for greater transparency and easier financial management within the B2B payment landscape is here.
With the introduction of FedNow in the United States last July and continued global adoption of Real-Time Payments (RTP), expect major advancements in instant payments in 2024. And while Canada's real-time payment system has not yet fully materialized, the opportunities for North American businesses to accelerate the full cycle of money movement have significantly increased.
Trend Update: Despite the slower pace of Canada's Open Banking initiatives, VoPay is filling the technological void. Canadian businesses can still gain access to advanced tools that will enable their business to match the global pace in payment innovation. Learn how.
Are You Ready to Future-Proof Your Payment Technology?
Stay ahead of these emerging trends with VoPay's API technology stack. Visit VoPay to discover how our solutions can transform your business and prepare you for the next generation in payment technology. Speak to a Fintech specialist today!
More insights await in Part 2 of this series – join us in shaping the future of payments together.
