The Paypers’ Global Payments and Fintech Trends Report 2024

As the payments sector undergoes continuous evolution, one undeniable truth emerges: the interplay of technology, innovation, regulation, and talent is steering its trajectory. Keeping pace with this evolution and understanding the driving forces behind its growth is imperative for individuals and businesses navigating this dynamic landscape.

The Paypers’ Global Payments and Fintech Trends Report 2024 serves as a guiding light, spotlighting significant trends for 2024 and beyond on a global scale. Drawing from insights provided by payments and fintech experts worldwide, we offer a diverse perspective to help businesses and financial institutions gain clarity on emerging growth areas. Our strategic analysis, supported by the latest payments and fintech market forecasts, goes beyond mere buzzwords, empowering all players in this industry to chart their path to success with actionable strategies and recommendations.

The Paypers has gathered insight and expertise from dozens of leaders representing companies operating right across the financial services spectrum. Our engagement for this report involved extensive discussions with innovation leaders, technologists, and industry experts from top financial institutions, businesses, solution providers, payment companies, and leading consultancies monitoring the latest innovations and trends in payments and fintech across key markets worldwide.

What you’ll find in the report

The Global Payments and Fintech Trends Report 2024 covers a spectrum of essential aspects:

• Cutting-edge predictions: A strategic assessment of significant trends, covering instant payments, fraud prevention, Embedded Finance, Open Finance, BNPL, digital currencies, and more, offering a comprehensive overview of industry developments.
• Valuable, quantifiable insights: A clear perspective on emerging growth areas, enabling stakeholders to understand the industry’s trajectory.
• Advantage through intelligence: Our report empowers businesses to explore new opportunities, make informed decisions, and gain a competitive edge, leveraging intelligence and educational resources to navigate this complex landscape.
• Global dynamics: From the US to Latin America, Europe, and Asia, our report explores unique influences on the industry’s growth, examining how different regions shape the payments landscape through demographic shifts, geopolitical considerations, technological innovations, and regulatory changes.

In the ever-changing landscape of global finance, fintech is undergoing a seismic shift, moving away from traditional structures towards a more equitable and efficient system fuelled by digital assets and AI. Geopolitical tensions, the climate crisis, and pivotal elections worldwide are shaping financial regulations, demanding responsible innovation. The crypto domain anticipates a resurgence, while fintech startups pivot towards profitability. Stakeholders navigate a spectrum of impacts, from positive regulatory dialogues to challenges for SMEs. Amidst this, opportunities arise in financial education, addressing the unbanked, and the personalisation of AI-driven services.

• Threats and opportunities analysis: Analysing both threats and opportunities in the competitive ecosystem and their impact on various stakeholders.
• Future outlook: Offering insights into expected outcomes over the next 5 years, the report provides a forward-looking perspective, equipping stakeholders with a roadmap for anticipating and preparing for future industry shifts.

Some key takeaways: anticipated trends for 2024 and beyond

Embedded Finance gains momentum: In 2024, Embedded Finance is set to experience rapid growth. Shift signifies a move towards greater financial inclusion and increased accessibility, enabling non-financial businesses to enhance customer offerings.

Cross-border payments are undergoing a major transformation: The cross-border payments industry is poised for significant change, led by a focus on real-time, interoperability, and cost-effectiveness. Fintechs are the main focus as they are building the infrastructure for real-time cross-border transactions.

At the same time, the emergence of central bank digital currencies (CBDCs) will play an important role in emerging collaboration, with greater emphasis on compliance and security. The aim is to provide faster, safer, and more transparent cross-border transactions.

What`s more, the surge in stablecoins is paving the way for better economic interoperability and streamlined worldwide commerce. Latin America, specifically, stands as a pioneer in this transformative wave, showcasing fast adoption and integration of virtual currencies into everyday monetary transactions. The digital payments revolution, initiated amid the pandemic, is now solidifying, increasing the interest in cryptocurrencies across Latin America.

Citing information from a Mastercard survey, a substantial percentage (51%) of customers in the area have actively used virtual currencies for purchases, with approximately 1/3 choosing stablecoins in their routine shopping activities. This widespread preference for digital currencies is propelled by a large portion of the population having limited access to standard banking offerings, providing an alternative towards a crucial financial lifeline for the underbanked communities.

Latin America’s fintech landscape is rapidly embracing USDC, for instance, for various use cases. This includes ecommerce platforms integrating digital dollars to enhance transparency and interoperability. Additionally, remittance platforms are leveraging USDC for streamlined cross-border transactions, marking its growing significance in the region’s financial technology landscape.

A2A payments challenge card dominance: A2A payments are set to directly challenge card payments in ecommerce, particularly impacting European markets. A movement is underway to reduce the primary role of cards, driven by a desire to cut costs for merchants and commoditise payment services.

Public digital infrastructure gains traction: The trend towards public digital infrastructure, similar to India’s India Stack, is anticipated to gain global traction. Recognising its pivotal role in fostering a thriving digital economy, more countries are expected to explore its development.

Banks embrace the open ecosystem: Banks are investing progressively in the open ecosystem, encompassing Open Banking, BaaS, and Embedded Finance, with notable momentum and commercial gains expected.

Focus on compliance and security persists: In response to global conflicts and evolving regulations, there is a growing emphasis on compliance and security. Trends from 2023, including increased use of AI and machine learning for sanctions screening and transaction monitoring, continue to shape the landscape.

Crypto resurgence: In the cryptocurrency realm, there is anticipation of a resurgence following the end of the crypto winter. Fintech startups are shifting their focus from relentless growth to prioritising profitability, and the concept of public digital infrastructure is gaining prominence globally.

Generative AI technology holds promise: Generative AI holds promise in financial services, offering numerous use cases to enhance existing tools and processes. However, it comes with risks, and firms must develop new business processes, risk, and regulatory frameworks.

Digitalisation and sustainability: These remain focal points for the European Commission in 2024, addressing potential disadvantages for vulnerable consumers in various legislative proposals. Initiatives such as the Accessibility Act and PSD3/PSR emphasise accessibility, protection, and inclusion for vulnerable groups in financial services.

Global economy and balancing innovation amidst tensions: The landscape of the global economy is heavily influenced by geopolitical tensions, the ongoing climate crisis, and crucial elections in various states. Policymakers are increasingly emphasising responsible innovation and technology application to address these challenges. This underscores the need for a careful balance between technological advancements and global risks.

Fintech market matures: The fintech market is transitioning into a phase where innovation for innovation’s sake is no longer a viable strategy. Economic pressures and intense competition drive the need for genuine progress on key pain points.

Rise of payment APIs and optimisation: Payment APIs are on the rise, constituting 34% of observed functionalities, with a global focus on instant payments. In 2024, businesses increasingly adopt payment optimisation to enhance revenue by streamlining transactions and addressing issues like declined payments and checkout complexity.

Traditional institutions embrace crypto-assets: Traditional financial institutions are undergoing a significant transformation, bridging the gap with crypto-assets. This involves creating crypto-related areas within banks for digital asset structuring, trading, and custody, driven by friendly regulations, specialised service providers, and the development of CBDCs (and stablecoins).

Anticipating a golden age of fintech: Anticipating a golden age of fintech, the industry emphasises profitability overgrowth, with Asia expected to lead by revenues in 2030. The return to first business principles mirrors broader technology trends and risk management plays a pivotal role. The tokenisation of assets, the shift towards Web3, and the growing importance of digital public infrastructure define the essence of fintech developments.

Amid the fintech and payments industry transformation, this report serves as a thorough guide to the trends shaping its evolution. The Paypers’ Global Payments and Fintech Trends Report 2024 equips everyone in the financial services industry with valuable insights for strategic decision-making. Enjoy your read!

About Oana Ifrim

Oana is a Lead Editor at The Paypers. Her expertise lies in the areas of Banking and Fintech innovation, with a particular focus on Open Banking, Open Finance, Embedded Finance, and Banking-as-a-Service. In her role, she manages content and conducts interviews with key experts in the abovementioned fields. Additionally, she represents The Paypers at various banking and fintech events, webinars, and panels. Moreover, she oversees trends research and content production, providing strategic planning and coordination for large-scale, industry-specific research, reports, and projects. If you wish to get in touch with Oana, she can be reached via email at oana@thepaypers.com or on LinkedIn.