2022 was, in many ways, a year of transition. Fortunately, much of the world has moved from months of mobility restrictions to a new normal that has been slowly but surely evolving. We have gone from 100% remote work to new hybrid models. Also from a growing economic recovery to great economic uncertainty in the short term. In this context, the global transition from cash to digital payments continues and with an eye on 2023, behold five trends in the payments landscape that from Visa we follow closely.
Business and leisure travel once again boost retail spendinga
Throughout 2022, global travel has picked up, helped in large part by the reopening of borders, which has released pent-up demand in one region after another, something we expect to continue into 2023 (with Asia-Pacific easing now also its controls). A recent study by Visa has revealed a general increase in the average spend per traveler abroad between June and August of this year, both in the retail sector and in traditional travel categories such as hotels, restaurants and leisure. Initially driven by more affluent travelers and extended vacations, growth in both cross-border retail and other non-retail travel spending has leveled off as the traveler mix broadens and travel durations return to normal .
This evolution has also highlighted an increasingly digital tourist. Without going any further, according to a study by Visa and the Payment Innovation Hub, 80% of international tourists who come to Spain already book both transport and accommodation through electronic commerce. In addition, 91% of international tourists state that their preferred payment method when visiting Spain is the card, whether digital (mobile phone) or physical.
Consumers, more determined and aware when choosing sustainable habits
Although this year there will be more people leaving home for work, leisure and other reasons, consumers are focusing concerns about sustainability and climate change in their behaviors and consumption patterns. According to a recent study by Skift and McKinsey, 40% of global travelers were willing to pay at least 2% more for carbon-neutral airline tickets. So far, that same data shows that only 14% of travelers have actually done so. In 2023, we expect to see more consumers take action in this direction as more options become available. Offers such as the Visa Eco Benefits package and the partnership with Ecolytiq offer consumers benefits such as climate awareness and carbon footprint calculation, helping them make more informed and sustainable decisions. For the coming year, we expect more rewards for consumers who make sustainable choices and tools to help them visualize their impact when making plans.
Convenience will also play a key role in helping consumers make sustainable choices in their everyday lives. For example, the ability to pay for public transport using a contactless credit, debit or prepaid card, or payment-enabled device, means that people no longer need to ensure they have funds on a designated transport card, ticket of paper or looking for cash when they choose not to drive.
Visa’s second survey on the future of urban mobility revealed that an overwhelming 91% of users surveyed expect contactless payments to be part of their transportation experience. Looking ahead, we expect contactless fare payment to become the standard for public transport, providing a more inclusive, efficient and sustainable mobility experience for users and operators alike. And with the Visa network surpassing 1 billion tap-to-ride transactions on global transit systems in just ten months in 2022, closing the fiscal year with more than 1.2 billion, we see no signs of slowing down. deceleration.
B2B becomes 3.0
Innovation in the B2B payments industry will fuel another wave of digital transformation. In 2023 and beyond, we will see a version 3.0 of B2B payments, where the new frontier of global B2B commerce will be fully digital, secure, fast, flexible and frictionless. We will see an increase in B2B mobile payments, as businesses prefer to be able to pay and collect by phone, and the digitization of B2B payments will drive the increase in B2B e-commerce purchases.
There are now more B2B companies than ever offering online payments, with 80% of B2B transactions expected to be digital by 2025. The digitization of business processes will continue to accelerate B2B transactions and integrated payment offerings beyond the paper checks and bills. Accounting teams are already seeing the benefits of sending electronic invoices and receiving digital payments. More and more governments are advancing in the digitization of payments, either in the form of disbursements to citizens or to and from agencies as clients. Banks, processors and networks continue to advance in the possible use cases of virtual cards. Innovation will continue as the ecosystem offers more features and functionality to streamline payments and business operations.
During the crypto winter, builders build
The cryptocurrency markets have experienced great volatility in the last year. Although the future remains to be seen, during the current crypto winter, we expect a number of less enduring concepts to fall by the wayside, while others focused on taking a measured and respectful approach to new technological developments will continue to build meaningful web3 solutions for businesses and businesses. consumers. In the aftermath of the recent liquidity lapses, we expect cryptocurrency platforms around the world to strive to ensure adequate protection and information for clients.
For the foreseeable future, governments, central banks, traditional financial institutions, and fintech companies will continue to focus on money and programmable payments, whether for CBDCs, stablecoins, or other forms of tokenized fiat money. Significant web3 payments use cases on the horizon include payslip streaming, micropayment streaming, and cross-border disbursement.
Lastly, we are seeing how brands are leveraging NFT technology to build new digital experiences, fueling its potential for new use cases in commerce, payments and loyalty. These experiences often focus on creating unique avatars, digital items that accompany physical ones and vice versa, and loyalty platforms. In the coming year, we expect this trend to accelerate as brands look to deepen their relationships and engagement with their customers. This has the potential to drive new commerce, payment, rewards or loyalty experiences between consumers and brands.
Fraud adapts to a “hybrid” world
As more and more people adopt a “hybrid” lifestyle and work, fraudsters are following suit, adapting their tactics to where we are and where we aren’t and finding new ways to scam consumers. A recent Visa survey revealed that more than half (58%) of travelers said they were concerned about the possibility of fraud on their credit or debit cards while traveling.
Perhaps the most recent threat is synthetic IDs, in which fraudsters create a new person from fragments of ID components. We can expect small businesses to remain a target, as they often lack the resources or knowledge to prioritize security tools and other protective measures.
All of this means that security and trust will continue to be paramount. Next-generation advances in authentication for user protection, such as EMV 3D Secure (EMV 3DS), are helping to make global e-commerce secure in real time. Digital payment methods and solutions like virtual cards will continue to make everything from buying plane tickets to dividing the tab at dinner easier and more secure. Businesses will also become more aware of the importance of investing in security tools to prevent fraud and insurance policies that can help mitigate the impact of a breach.