2024: Invisible payments, digital currencies, wallets and AI

As 2024 begins to pick up pace, we continue to look at invisible payments, digital currencies, wallets and AI, the major themes for 2024.

Invisible payments, digital currencies, wallets and AI

To that end Payments Cards & Mobile interviewed Tommaso Jacopo Ulissi, Head of Strategy, Transformation and Capital Allocation at Nexi Group about what the payments groups sees as strategic for the year.

How will younger generations impact the world of payments in 2024?

The new generations, particularly Gen Z, have grown up in the digital world. They have never experienced the analogue world and they don’t plan to do so.

Data has clearly shown that younger generations prefer convenient, mobile-enabled payments that are driven by a broad variety of wallets that provide value on top of just making a payment.

These payments typically offer a speedy “tap and go” experience. Increasingly this year, more payments will be conducted invisibly, without even the friction of a tap or any manual initiation of the payment.

Payments will instead be conducted behind the scenes, within the terms that you have agreed by identifying yourself, such as a voice command, or scanning the registration plate of your car.

In the coming year, we expect to see more merchant stores not just become cashless, but cashierless, enabled by fully automated payment processes, potentially based on biometrics.

Is 2024 the year digital wallets and digital currencies hit mainstream?

In Europe, the latest regulation, as well as fast-growing penetration of national solutions and instant payment solutions, is driving adoption of Account-2-Account (A2A) payments and digital wallets across the continent.

In 2024, more digital wallets will emerge, driven by merchants, banks, and big tech players, making payments via mobile phones more simple and convenient. This provides more choice and value for the consumer.

Although the best-known examples today may be Apple Pay and Google Pay, there are more payment wallets on the horizon. In addition, the European Payments Initiative (EPI) is expected to launch “wero” this year, its new Europe-centric digital wallet solution.

This initiative is designed to deliver a European digital payment solution that meets evolving payment requirements.

The digital wallet aims to offer a seamless, user-friendly payment experience to both consumers and merchants.

wero will utilise an A2A infrastructure, offering faster payment flows with value-added services.

This will including online shopping and loyalty programs, as well as person-to-person (P2P) transactions, as it aims to fill gaps in the European payment space and become the digital wallet of choice for consumers.

Digital transformation in Europe doesn’t stop there. In 2024, following the European Central Bank (ECB) investigatory phase into how a digital Euro might work in practice, you can also expect to see progress towards the creation of a digital wallet for Central Bank Digital Currencies (CBDCs).

A digital Euro wallet, created with the relevant public authority, will ultimately provide the public with a digital form of cash.

What could this mean for consumers?

Well, they would be able to deposit money into their wallet through a linked bank account or a cash deposit. After doing so, they could start making digital currency payments face-to-face and online.

While this new form of money is being explored, it’s vital that the supporting payment system is as customer centric as possible: user friendly, trustworthy and open to all.

How will verticalized, embedded payments evolve in 2024?

This year, payments will become more embedded into combined software offerings, frequently tailored to a specific vertical.

In this way, they can support smaller merchants, giving them access to a one-stop-shop of payment solutions and value-added services beyond the payment function.

Independent software vendors (ISVs) can prove themselves strong partners to payment providers in 2024, combining business management software, including payment, into one solution that addresses all merchant needs.

The choice this offers, for simple and quick integrations, enables vertical-specific merchants to access and embed a platform for tailored digital payment solutions.

This has the potential to incorporate merchant financing or Buy Now, Pay Later (BNPL) options for consumers.

For example, if a restaurant manager wishes to take bookings, orders and payments via an iPad device; or if an electrician wishes to accept payments at the convenience of the customer, this is all possible with softPOS technology on their existing mobile phone.

How will Artificial Intelligence (AI) impact digital payments?

AI will increasingly become more integrated into business processes and solutions, enabling companies them to optimize a variety of different internal processes.

For example, merchants, could have an AI assistant that helps their business leverage data analytics, create webstores, set up chatbots for consumers, or build value-added services autonomously.

AI will also integrate more deeply into the payment mix, utilising generative capabilities to create hyper-personalised solutions that enhance the shopper experience.

It can do this while also assessing the risk profile of every purchase in real time and reducing the number of cumbersome checks.

As technology evolves to become more trustworthy and accurate, previously unthought of shopping experiences will be at the fingertips of every shopper in the digital age.