The digital payments market is experiencing unprecedented growth, with virtual payment card provider Lanistar estimating that it will be worth over $20 trillion by 2026.
This is being driven by a combination of economic and societal changes, as well as technological innovations that are making financial services more accessible and convenient than ever before.
Below, we explore some of the key trends that are driving this growth and how payment providers can capitalize on them.
1. The rise of new generations of consumers
The Millennial and Gen Z demographic groups are leading the charge on digital innovation, embracing digital and smart device payments and virtual cards.
This trend, alongside a wider choice of alternative payment cards, is making financial services more accessible than ever before, ‘democratising’ the process through technological innovation.
2. Reaching the unbanked and underserved
Many people, particularly in the Global South and lower-income households, are unbanked or underserved by traditional banking services.
Prepaid or eBanking debit payment cards are an inexpensive and secure option for these consumers, making them best placed to meet their financial needs.
Payment providers need to offer the right services at an affordable price point to tap into this underdeveloped market.
3. The gig economy is changing payment habits
The gig economy is a significant trend that is changing the way people work and get paid.
Payment cards, whether physical or virtual, are playing a crucial role in ensuring that contract workers receive timely payment for their work.
4. Apps and the mobile-first experience
Providing an easy-to-use, seamless, and intuitive mobile-first experience is a priority in the payments space.
With the majority of the world’s population owning smartphones, payment providers need to offer a mobile platform that is easy to navigate and use.
5. Balancing transactions in the physical and virtual
While digital solutions are growing in popularity, physical transactions are still prevalent. Effective payment solutions must balance speed, cost, and security with user experience. Payment providers need to ensure their services are available wherever customers are spending their time and their money, from physical to virtual.
Jeremy Baber, CEO of Lanistar, noted that the real success of payments will come from them being integrated into our daily lives seamlessly. The ultimate goal is for payment solutions to be so deeply integrated into a person’s day-to-day transactions that they are not even conscious of it.
The growing digital payments market is driven by a combination of economic and societal changes and technological innovations. Payment providers must tap into this market by offering services that are accessible, affordable, and seamlessly integrated into the lives of their customers. By doing so, they can provide a frictionless and invisible payment experience that is intuitive, secure, and convenient.
