The digitalization of payments
In 2023, digital payment is no longer an option, but a real necessity. Year after year, we see that the French are demanding more digital services offered by their merchants. To meet this need, new payment trends are developing. These are based on various innovations, such as Open Banking, NFC technology, and the use of network tokens.
Open Banking: innovation in new digital payment methods
If many innovations related to payment are emerging, it is notably thanks to Open Banking, which arrived with DSP2 (Payment Services Directive) in 2021. This regulates the use of data by new payment players, while stimulating competition and innovation.
Open Banking is a financial concept based on the use of digital technologies to open banking data and services to third parties via application programming interfaces (APIs). This data sharing enables the creation of new applications and services around existing financial infrastructure, using banking data.
Payment being an essential element in the customer journey and loyalty, and thanks to Open Banking, certain fintechs, such as CentralPay, have been able to develop innovative payment services.
Tokenized transactions for recurring payments
Tokenizing cardholder banking data transforms the way bank cards are used. Every night, the bank card data update (or CB MDC) synchronizes bank card data (card number, expiry date) to provide a seamless payment experience. Even when a new card replaces the old one, the customer doesn’t need to re-enter all of the new card’s information on sites where they may have opted for recurring payments (subscription, monthly payment, etc.) or one-click payments.
This “network token” takes over from the card in authorizations, simplifying transactions on equipped sites and avoiding blocking the subscription because of a simple expired card.
Request to pay, payment validation by email, SMS or link
Request to Pay is a digital payment system that allows billers (such as businesses or service providers) to send electronic payment requests directly to customers, via any messaging or notification channel. This method offers greater flexibility and control to customers, who can choose how and when to pay, and also allows them to negotiate or schedule payments.
The innovation of this system lies in its ability to simplify the invoicing process, strengthen transaction security, and improve financial interaction between parties, making payments more interactive and tailored to user needs.
The widespread use of wallets
Wallets are tools used to store, send, and receive money through an app or online payment account. They can be used for a variety of transactions, including online shopping, money transfers, bill payments, and even, in some cases, in-store transactions via technologies like NFC (Near Field Communication).
Buy Now, Pay Later
Buy Now, Pay Later (BNPL) is a financing model that allows consumers to purchase products or services immediately and defer payment, typically without incurring additional costs or interest. This concept is made possible by the Request-to-Pay system, where the payer can propose a payment schedule to the seller when approving the transaction.
Among this year’s payment trends, BNPL will have a significant impact on:
- Regulation: Faced with the expansion of deferred payment, the regulator is looking into the issue of BNPL to ensure that it does not contribute to irresponsible consumer debt.
- Financial innovation: BNPL opens up new perspectives in the financial sector, notably with the proliferation of payment institutions specializing in recurring payments.
Customer mentalities: Even if it is not always presented in this way, Buy Now, Pay Later is a real consumer credit.
Conversational commerce
Not all Internet users are comfortable using e-commerce sites and their online payment forms. As a result, some retailers are implementing “conversational commerce,” which is even more innovative than mobile apps or payment facilities. Customers who wish to do so are guided through their purchases by a chatbot, sometimes powered by AI. This “virtual agent” guides the customer throughout the purchasing process, right up to the payment stage. This makes the shopping experience easier and more enjoyable!
Embedded finance integrated into non-financial sectors
Embedded finance, a key payment trend for 2023, involves integrating financial services into non-financial environments, such as payment, insurance, and credit solutions. Financing options are typically offered at the collection stage, without the need for a financial institution.
