Promoted feature: What will payments look like in 2022?

The Covid-19 pandemic has increasingly driven consumers to make payments digitally and utilise digital wallets, and with growing fears of the new Omicron variant, there is no doubt that this trend will only continue to rise. A recent report in FinTech magazine suggests that by 2026 the UK will be almost entirely cashless.

The heavy reliance upon digital wallets means that the fintech payments space is going to be a core focus of consumers in 2022 – with more and more people going cashless as well as the prevalence of millennials and Generation Z consumers – so there will be a lot of advancements to look forward to in the coming year.

Fintech to be at the forefront of payment solutions

We predict 2022 to be a year in which fintech companies will be at the forefront, leading with technological advancements, especially those armed with experience in dealing with the complexities and challenges of operating in emerging markets. This experience has enabled some fintech companies to better understand the needs of their end-users and are therefore able to create user-centric payment processes best suited to them.

The rapid digitisation of payment processes is not only due to the pandemic. Millennials and Generation Z have a large role to play when it comes to the rise in consumers using digital forms of payments. Both generations have grown up with technology and use it in their everyday lives. They use social media, digital channels and apps as their main engagement platform.

With millennials and Generation Z now hitting the prime of their careers, they are now leading the way in the adoption of digital wallets. This puts fintech companies under a lot of pressure when it comes to digital payments as end-users are increasingly demanding a better user experience, a smoother checkout process and a safer way of making transactions.

Furthermore, we are also seeing the expansion of digital services that incorporate face-to-face modalities, this includes QR codes being used to pay for petrol and digital wallets to pay at restaurants. Although the pandemic has in some ways shifted face-to-face processes over to a digital format, it has also done the reverse, and we will continue to see developments in these types of services over the following 12 months.

What are users demanding?

Non-traditional payment methods such as credit cards and traditional banking institutions are losing popularity, and consumers have now adopted digital methods such as QR codes, payment links and digital wallets.

An estimated 12% of the global population uses digital wallet apps on a regular basis, and this number is set to surpass 1.3 billion within the next three years. This growth means that consumers will be continuously demanding more and more enhancements to be added to their payment methods, and we are already seeing this with the introduction of voice-enabled payments. There is no doubt that in 2022 we will see many more advancements to alternative payment methods.

As a result, there will be fierce competition among fintech companies to deliver more user-centric and seamless processes for their customers. This drive towards digital payments will be greater and get bigger going into 2022, with end-users and their growing requirements being the centre of focus for fintech companies.

For these B2C companies, the end-user focus is of primary concern, which is also why we at AstroPay have created ‘One Touch’ to create a continuously seamless and user-centric experience for our end users. By understanding our end users, we are able to create the user experience that consumers want and provide a high level of security and a user-friendly environment.

As with other companies that have achieved a lot of popularity and success in emerging markets – where people do not necessarily have the access to bank accounts or credit cards to make transactions in international websites – AstroPay has come to realise the big opportunity presented in these countries. We have seen this happen with our digital wallet One Touch when it was launched in India, and how quickly it gained mass popularity among consumers.

What to watch in 2022

This year we have witnessed a rapid transformation within the payments industry, with more users shifting to digital payment methods and an increased sense of trust in digital wallets from merchants and end-users alike.

With great popularity comes great challenges. In 2021 we have seen a massive drive towards cashless/digital payments, but in 2022 this drive will only be greater. This growing number of end-users means we are going to see a greater demand for more technological advancements and developments to take place in the world of digital wallets. The pressure is really on fintech companies to be able to pull through and deliver.

End users require an excellent and advanced shopping experience, and this demand will continue to grow in 2022, hence why it will be crucial for fintech companies to focus on what end users require and what are their specific demands. If companies do not make end users the centre of their focus in 2022, they will have failed.

Mikael Lijtenstein is the CEO of AstroPay, a pioneering payment solution for consumers making online purchases on international sites. Before becoming CEO in November 2019, Lijtenstein was AstroPay’s chief operating officer, responsible for sales and operations, product development and innovation across multiple markets including Latin America, Asia, Africa and Europe. Prior to AstroPay, he worked at dLocal, an Uruguayan financial technology company, where he held several roles including head of operations and software developer. Lijtenstein has considerable technical expertise and experience in providing cross-border payments and connecting global merchants to emerging markets.