What Lies Ahead for Payments and Commerce in 2022
The pandemic has been a focal moment for driving transformation in the world of commerce and payments. In this article, leading Visa experts look ahead and provide their insights on what changes we can expect to see globally and in the Central and Eastern Europe, Middle East and Africa (CEMEA) region, when it comes to economic recovery, payments, and security. They consider the implications of emerging trends and what it means for business growth.
The Future of Money is Digital: Payment Trends for 2022
Andrew Torre, Visa’s Regional President for CEMEA discusses the changes to online and offline payments due to the COVID-19 pandemic, and how habits accrued during this period have been sustained as restrictions have gradually lifted and offices have reopened.
“While uncertainty and unpredictability are now expected, one thing that is clear is that that the future of money is digital. The pandemic accelerated change, but we have seen a permanent behavior shift to digital that is set to last far beyond,” says Andrew.
In the year ahead, the following trends are the ones to watch:
- Embedded finance: open innovation has made once complex and expensive banking infrastructure much more accessible, allowing any company to become a fintech.
- Green payments: consumer awareness and appetite for sustainable products has never been higher, following the culmination of the COP26 meeting.
- The Metaverse: creating a new shared space between different digital worlds, blending virtual and augmented reality, presents enormous opportunities.
- Buy Now Pay Later: following another year of rising eCommerce adoption, consumer interest in instalment-based solutions has rapidly increased.
- Crypto goes mainstream: another fast-growing 2021 trend that will become even more prominent this year is the integration of crypto into mainstream financial services.
- Open banking: while data is a key ingredient in a truly personalized offering of financial services, it is paramount that consumers can share sensitive information with third parties in a more secure manner.
Securing the Future of Money – What’s Ahead in 2022
An undeniable trend in the world of payments since the onset of the pandemic has been the proliferation of digital commerce. With the shift online, however, there are also now more avenues than ever for cyber criminals to commit payment fraud. Visa’s Chief Risk Officer, Paul Fabara, offers his insights on top five digital payments trends expected to take centre stage in 2022.
“To combat the fight against fraudsters, this year we’ll see the proliferation of some extraordinary, best-in-class security practices that will change the game,” says Paul.
- Biometrics will become the default form of authentication: with an increasing number of customers feeling comfortable with the technology, biometric payments are here to stay.
- Manually addressing the rise in enumeration attacks will no longer be adequate: the diversification of digital payment options creates optionality for both consumers and fraudsters. Ensuring the safety of online channels will be a challenge that issuers and merchants must tackle together.
- Interest in crypto will continue and the sector will mature with regulation appearing: as cryptocurrencies continue to gain popularity fraudsters too are following the money and despite their popularity this still nascent sector will need regulation and payment security protocols to safely thrive.
- Issuers and merchants will team up to tackle first party misuse: first party misuse is a time consuming and costly process for merchants and can lead to lower approvals. Solutions are possible but they will require cooperation across all parties in a transaction.
- Companies will invest more money into business continuity and risk management: the pandemic highlighted the importance of planning for business continuity in the event of disruption and may put such plans through a rigorous test. Looking forward, more companies will adopt and adapt these plans.
2022: CEMEA’s Year of Economic Recovery
Mohamed Bardastani, Economist and Director of Business and Economic Insights, Visa CEMEA, provides his expert perspective about the expected economic recovery of the CEMEA region, which is buoyed by the easing of government restrictions, return of consumer mobility, rebounding economic activity, progress of vaccination campaigns and higher oil prices for the major oil exporters.
“CEMEA’s real gross domestic product (GDP) is estimated to have risen by 4 percent in 2021, whilst growth is expected to moderate slightly in 2022 and 2023 to 3.9 percent and 3.7 percent, respectively,” says Mohamed.
Although emerging variants of Covid-19 continue to produce a negative economic impact, CEMEA economies are recovering. Mohamed highlights key developments across the region which have driven this recovery, namely:
- The policy imperative of economic diversification across Gulf Cooperation Council countries, which is expected to gather further momentum this year.
- The increasing investment inflows into African startups, which have served as a testament to the attractiveness of the region to investors.
- Accelerating digital transformation spurred on by the pandemic, particularly noticeable in the utilisation of business-related apps.
Despite these positive developments, rising consumer prices and continued supply chain disruptions remain an obstacle to the return to pre-Covid levels of activity.
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1 Oxford Economics, Global Economics Databank
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