Digital wallets, open banking and instant bank transfers are set to become the main forces transforming the payments landscape in the coming year, according to new research by payabl, the European financial service provider.
Through a recent survey, payabl found that 81 per cent of merchants expect to see growth in digital wallet usage, while 69 per cent expect open banking and instant bank transfers to gain popularity as consumer demand for convenient, secure payment options continues to grow.
The findings highlight the industry-wide shift toward faster, more adaptable payment methods that meet consumer expectations. Fifty-nine per cent of respondents noted that consumer demand for convenience is the top driver of innovation, followed by advances in technology (52 per cent) and regulatory changes (49 per cent).
Merchants also expect other payment methods to experience growth in the next year:
QR code payments (33 per cent)
BNPL options (25 per cent)
Cryptocurrencies (21 per cent)
CBDCs (11 per cent)
While many merchants recognise the need to adapt their payment options to keep up with changing consumer expectations, the majority are prioritising security and fraud detection. One of the main reasons for this is that 63 per cent of merchants believe this is their main challenge for the year ahead. To this end, 65 per cent of merchants plan to invest in artificial intelligence (AI) over the next 12 months, recognising its role in real-time fraud detection and improved payment performance.
Meanwhile, 56 per cent are adopting data analytics to gain critical insights into payment behaviour, while 38 per cent prioritise API-based integrations to enhance flexibility and security in their payment ecosystems.
Ensuring regulatory compliance
Regulatory compliance also emerged as a significant challenge, with 60 per cent of participants highlighting the complexities of navigating evolving regulations. Respondents also identified PSD3 and APP fraud regulations as one of the upcoming transformational trends in the industry (50 per cent).
As Europe’s SEPA Instant payment deadline approaches on 9 January 2025, industry readiness remains uncertain. While banks and PSPs are required to support instant payments, only 25 per cent of respondents expect the industry will be fully prepared, highlighting the importance of collaborative efforts across regulatory bodies, financial institutions, and merchants to ensure a smooth transition.
“Merchants are clearly focused on future-proofing their payments strategy to meet the growing demand for convenience and flexibility and address the major challenges around regulatory compliance and fraud prevention,” explained Ugne Buraciene, group CEO of payabl. “By aligning technology investments with these consumer expectations, they are not only boosting resilience but also paving the way for a sustainable, future-ready ecosystem.”
Meanwhile, cryptocurrencies and digital assets are also in merchant’s minds, with 19 per cent noting their growing influence. Lesser-discussed trends include embedded finance (13 per cent) and sustainable payments (eight per cent).
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