Payment predictions for 2023
Consumers are becoming more sophisticated with online payments. They expect not only a frictionless and safe payment experience, but also a more personalized customer journey, starting from their mobile. We anticipate further growth of other smart devices (also powered by the Internet of Things, "IoT") and digital wallets, which will be tied closer to our digital identities as legislation in Europe continues to advance. Moreover, an increasing uptake of other complementary payment methods such as Account-to-Account will characterize the ongoing digitalization of everyday purchasing.
For merchants, digital is becoming central to their businesses strategy. While we expect SoftPOS to catalyze momentum for increased digitalization, we also expect the merchant's offering to become more sophisticated, delivering increasingly seamless payment experiences to their clients. Merchants will progressively adopt omnichannel solutions, aiming to capture eCommerce growth, and will implement data-driven value-added services (VAS) to increase conversion on online and offline platforms.
This reflects increasing convergence between software and payments into commerce platforms, also via Independent Software Vendor (ISV) and Personal Software Process (PSP) partnerships, to provide business management capabilities to merchants across the entire lifecycle. This is tailored to the specific needs of each differentiated segment, including the restaurant, hospitality, and retail industries. Such platforms will become a one-stop commerce solution for merchants where financial and other additional services will be progressively embedded.
Lastly, the ever-evolving payment ecosystem is facing upcoming changes at a systemic level in 2023. Such change will see accelerated efforts from Central Banks to develop regulated and viable digital currencies. In 2022, the EU, China, India and many other countries all made steps towards developing their own Central Banks Digital Currencies (CBDCs). More countries will do so in 2023.
CBDCs have the potential to offer a safer, faster, cheaper cross-border payment experience for banks, retailers and consumers. This promotes greater financial inclusion in a world where new forms of private-led money, namely cryptocurrencies and stablecoins, have turned out to be risky investment assets rather than a digital storage and transfer of value. As economies around the world are put under increased strain in 2023, CBDCs can provide an opportunity to strengthen central monetary sovereignty. In this regard, the launch and progressive roll-out of the Digital Euro will be one to "watch out" for in the European industry.