We’ve said it before: It’s the payment experience, not the payment, that matters — how you put payments to use, the value-added services wrapped around the payment. This is where the smart will focus in 2024.

For years, everyone from consumers and merchants to the ecosystem players has focused on the payment itself — making it cheaper, more accessible, more embeddable — and now, the pandemic has made digital payments commonplace. To counter the risk of becoming a commodity, you will need to focus less on the payment in 2024 and more on how you differentiate by anchoring greater value and opportunity around it.

Future leaders will think creatively about where they can graft additional worth onto payments, whether that’s B2B payments providers using their networks to amplify their value to clients or whether it’s payments becoming secondary to identity, ticketing, and loyalty as the primary differentiators in interwoven digital wallet experiences.

The players who make a difference will be those who wrap greater value or utility around payments. Our predictions for the coming year include:

  • Micropayments will break out of their niche and become an alternative to subscriptions. In 2024, a major content provider will formally offer micropayments to offset rising cancellations from rigid subscription plans. Offering micropayments as a “pay only when you use” option will offset this lost revenue by enabling on demand microconsumption, taking the utility of micropayments beyond influencer and social platforms, niche media platforms, and the gig economy.
  • 2024 will be the year for account-to-account payments. In Europe, PSD2 payment innovation is bearing fruit, and in 2024, payment initiation adoption will more than double, spurred on by the EU’s instant payments proposal. By late 2024, hundreds more banks and payments services providers will launch account-to-account (A2A) faster payments capability built on the recently launched FedNow. Merchant sensitivity around card fees acts as an accelerant, and banks will turn to A2A to deliver payments solutions that turn open banking insight into executable action for their customers. In Asia Pacific, the focus will be on pursuit of scale through interoperability as real-time cross-border A2A payments initiatives such as Project Nexus come on stream.
  • Non-payment use cases will dominate the headlines for digital wallets. In 2024, non-payment use cases such as identity, ticketing, and passport and license storage, along with retail loyalty, will be behind 75% of digital wallet announcements as consumers, governments, retailers, and businesses finally see beyond mobile payments. As a result, wallet usage will increase by 20% in Europe and North America. In Asia Pacific, more than half of transactions will originate in digital wallets in 2024.

In 2024, payments executives will need to work harder to win and stay on top of their game, with a heightened focus on amplifying value for their customers. For some, this means elevating payments to a strategic function for their firm, while for others, it could be encapsulating payments in slick experiences or using real-time network upgrades to create distinctive benefits for their customers.

Forrester clients can read our Predictions 2024: Payments report or watch the webinar for our full set of predictions, as well as set up a Forrester guidance session to dig deeper with our payments experts.

If you aren’t yet a client, you can download our complimentary Predictions guide, which covers our top predictions for 2024. Get additional complimentary resources, including webinars, from the Predictions 2024 hub.