8 Payment Technology Trends to Watch in 2024

1Digital wallet trends

Digital wallets accounted for nearly half of online transactions worldwide in 2022 and could further increase to 54% by 2026.² Some of the popularity may be attributed to the fact that it’s so easy to download a mobile app and start making purchases in-person or online.

As digital wallets become widespread, biometric authentication that relies on face, fingerprint, or retinal data may become increasingly important to improving security. Your customers’ biometric data may offer a strong defense against fraud, and capturing that data as encrypted code could make the process even more secure.

This becomes even more important as cross-border payment platforms try to help your customers connect and seamlessly navigate complex international payment systems. By simplifying digital transactions, digital wallets hope to make that complexity easier to manage.

In the U.S., Venmo also continues to grow, with 90 million active users and counting. It remains a platform of choice for a younger, more social and mobile demographic: 26% of Venmo users are between the ages of 18 and 29, and another 30% are between ages 30 and 39.³ And it isn’t just for peer-to-peer payments anymore: 47% of Venmo users surveyed report having purchased an item using Venmo.⁴

2Mobile payment technology trends

Mobile payment technology trends center on contactless in-person payments, like tap-to-pay and QR codes. Due in no small part to the impact of COVID-19, the market for contactless tech is growing: According to one report, in the U.K., U.S., France and Australia, tap-to-pay is the top contactless payment method that shoppers are comfortable with.⁵

Tap-to-pay includes digital wallets used in person, as well as contactless credit cards, which have taken speed and security to a whole new level. Each is equipped with a chip that can be tapped over a payment terminal, using near-field communication (NFC) to transfer the data wirelessly.

QR codes are another way to give your customers a contactless payment option. They can now be found almost everywhere from clothing stores to restaurants, and they’re likely here to stay. One survey found that 59% of respondents believed that QR codes would become a permanent part of using their mobile phones.⁶ If you aren’t already offering them to your customers, it may be worth getting on board with this payment technology trend.

3Buy now, pay later trends

The buy now, pay later (BNPL) market is still strong, with total market value expected to grow by nearly $450 billion by 2026.⁷ For PayPal Pay Later alone, global total purchase value (TPV) has grown 867% since its launch in November 2020.⁸Many demographics

are attracted to the idea of a flexible way to make interest-free purchases, but it’s an especially good way to reach younger audiences: A recent study of Gen Z's payment habits found that this generation makes up 55% penetration in the BNPL space, with 26% saying they’ve used it up to three times in the last three months.⁹

The Consumer Financial Protection Bureau (CFPB) has also been monitoring the market, and regulations could be coming in the future. Working with an experienced payment processor like PayPal means you can leverage years of knowledge and efficiently work to comply with changing regulations.

4Digital currency trends

By recording financial account information (like balance and transaction history) in time-stamped, unchangeable “blocks,” digital currency — a term that most often refers to cryptocurrency* — can potentially offer consumers greater efficiency, transparency, and security, all without the involvement of a financial institution. When customers use it to buy a product, the crypto is sold and converted to fiat (government-backed currency) to pay the merchant.

Crypto is volatile and its value can rise and fall quickly. Still, recent forecasts predict a healthy compound annual growth rate (CAGR) of 14.4% through 2027, with projected revenue of $64.9 billion in that year, compared to $34.9 billion in 2023.¹⁰

Low fees and speedy global transaction times could give digital currency a competitive edge over traditional payments. With a projected 994.3 million global users by 2027,¹⁰ you can likely expect growing usage throughout your customer base. The industry may also transition to a more standardized, regulated era, with potential fintech payment regulation trends further stabilizing the market.

5Social media payment trends

Social media continues to shape many aspects of our lives, and payment technology trends are no exception. Social commerce is on the rise: It generated about $728 billion in revenue in 2022, expected to rise to $6.2 trillion by 2030.¹¹ Yet only 34% of respondents in one survey said they trust social media.¹² Businesses may be able to fill this trust gap — and help drive conversion — by offering trusted, seamless payment experiences.

Livestream ecommerce is another growing trend. In fact, in one survey, 64% of businesses planned to focus on livestreaming shopping in 2023.¹³ The ability to accept payments in-app and in-context will enable merchants to leverage these channels to help drive conversion and revenue in new ways, while keeping pace with the latest trends.

6AI payment technology trends

As the livestreaming trend shows, providing a brick-and-mortar-like experience virtually seems to connect deeply with shoppers and help boost sales. But many businesses want to take virtual experiences even further: 53% said they plan to focus on offering augmented reality (AR) tools to help customers virtually try and choose products.¹³ Artificial intelligence (AI) comes into play here: It improves AR shopping by recognizing speech and adapting to users’ behavior, providing an ever-more-realistic experience.

AI plays a role behind the scenes, too. Optimized routing tools powered by machine learning can potentially help speed up approvals, decrease false declines, reduce chargebacks, and create a more streamlined customer experience from the frontend to the backend. Machine learning also powers the latest payments fraud mitigation tools, which leverage large-scale analytics to look for patterns, trends, and anomalies.

7Travel payment technology trends

With the pandemic (mostly) in the rear-view mirror, travelers have returned to the roads, rails, and airlines in droves. Yet customer preferences have changed, and flexible, seamlessly integrated, and reliable payment technologies could be the key to future success.

What do travelers want? According to one global travel payments survey, 71% of surveyed respondents are likely to use BNPL payment options when making travel purchases.¹⁴ Beyond delighting your customers with their preferred payment methods, you could increase average order value (AOV): For merchants in the travel vertical, PayPal Pay in 4¹⁵ AOVs are 31% higher, and PayPal Pay Monthly¹⁶ AOVs are 245% higher, than standard PayPal AOVs.¹⁷

Many travel businesses are also creating exclusive subscriptions that offer special deals or rates. Almost a quarter of surveyed hotels already offered memberships before the pandemic, and 27% are considering implementing them in the future.¹⁸ And nearly 1 in 5 surveyed adults in the US have signed up for a paid travel subscription program.¹⁹ The ability to integrate subscription programs directly into your payments platform via secure, seamless, and automatic recurring payments could help you see success in this area.

8Healthcare payment technology trends

The healthcare industry experienced one of the most drastic digital transformations during the pandemic. Telemedicine became more commonplace, with entrants like hims & hers disrupting the traditional in-person patient care model. In fact, the global market volume for digital treatment and care is projected to increase to $112.6 billion by 2028.²⁰ Online pharmacies like Pillpack are also on the rise. Pharma ecommerce is expected to grow almost fivefold by 2029.²¹

The digitalization of the industry means that secure vaults and recurring payments lead the way in healthcare payment technology trends: 61% of respondents want healthcare platforms to store their credit card information.²² The ability to securely store shoppers’ payment details for recurring payments and easy future checkout may help support their efforts to create more streamlined programs and improve retention.

Additionally, new forms of financing may make it possible for patients to ease the burden of up-front costs. Specialized lines of credit and BNPL options may become more commonplace in the future. In fact, 72% of respondents say they want a healthcare platform that helps them arrange financing options for their medical bills.²²