Payment Digitisation Redefines Customer Engagements

Dec 9, 2020

Luzviminda Daracan
Research Officer
PCCW Solutions

Global digital payments are expected to reach an annual transaction value of US 4.4 trillion in 2020, with 17% CAGR through 2024.i How can enterprises leverage payment digitisation to drive transformation and ensure they prevail in the unique business landscape?

Digital platforms offer the opportunity to rapidly scale up access to financial services using mobile phones, point of sales (POS), and other broadly available access points. Various digital payment solutions have emerged and will dominate the future of digital payments providing seamless customer experience.

Mobile Wallets

Wider access to mobile devices has given customers flexibility to access the Internet and in turn digital financial services like mobile wallets. By 2024, nearly 4 billion, or 50% of the world’s population will use mobile wallets, pushing wallet transaction values up by over 80% to more than US $9 trillion per annum. ii

There is an emergence of a number of mobile-wallet payment services:
• Serving as a P2P payment app with the basic functions of top-up, money withdrawal and money transfer
• Supporting only online and in-store merchant payments without P2P payment function
• Functioning as an integrated mobile wallet supporting both merchant payment and P2P funds transfer

Contactless Payments

Contactless payments are powered by NFC technology for wireless data transfer between NFC readers and mobile devices like smartphones and smart watches, or tap-to-pay credit and debit cards, allowing encrypted and lightning-fast checkout experience. Digital payments initiated by banks, including promotion of contactless cards, will further fuel the growth of contactless payments, which will triple to US $6 trillion worldwide by 2024, registering a CAGR of 300% over the forecast period 2020 - 2024.iii NFC-based payments in public transportation bundled with financial services offered in mobile payment apps will also trigger expansion in the market.

QR Code Payments

A QR payment is activated by scanning a code with mobile phones, complimented for its simplicity, speed and security. Deployments are evident around the globe as businesses increasingly accept digital payments without investing in any hardware, such as POS terminals. During pandemic lockdowns, and times of social distancing, both QR-initiated payments and the deployment of codes by merchants have increased.

Biometrics Payment

The biometrics payment is set to grow with payment card players and mobile wallet vendors building biometric solutions for contactless payments. By 2021, there will be over 18 billion biometric transactions with biometric authentication to secure US $2.5 trillion worth of mobile payment transactions.iv This secure advancement for seamless payment authorisation will protect against digital threats while ensuring robust financial services amidst security concerns.

Frictionless Customer Payment Experience

Besides the current digital payment innovations, bundled financial services will emerge, providing mobile payment apps with a single interface for multiple cards and bank accounts where users can easily switch from one bank account to another, helping them to pay as they go.v With the right partner to navigate the many complexities of on-demand commerce, enterprises can deploy customer-centric, secure and seamless payment solutions across available channels and geographic boundaries.

iQR Code Merchant Payments, GSMA Intelligence
iiHalf the World’s Population to Use Digital Wallets by 2024, Juniper Research
iiiContactless Payment Transactions to Reach $6 Trillion Globally by 2024, Fueled by Increased Card Use, Juniper Research
ivBiometrics to Secure $2.5 Trillion In Mobile Payments By 2024, Juniper Research