The Biggest Trends in Payment for 2024

From payment methods to localization, we asked our experts, and they told us what payment topics will shape the 2024 market for eCommerce and other businesses.

Buy now pay later

BNPL (buy now pay later) will be a very interesting topic because it was huge in 2021/2022 but saw some big losses in 2023. However, it’s still a popular concept, so 2024 will probably be the year when we’ll either see successful applications or a temporary goodbye from the eCommerce market. (Sushant Chavan, Product Manager at Billwerk+)

Buy now pay later (BNPL) is pretty self-explanatory: consumers make a purchase but instead of paying everything all at once, they can pay in increments with the first one being paid immediately and the rest over a defined amount of time (this can range from several months to a year or more). The most popular finance services that deal with BNPL are Klarna, Afterpay or Affirm, however, also other payment providers are offering similar services.

For consumers, this payment method usually has a lot of advantages. It’s easier to get a BNPL loan and many do not have an interest rate (although that has been changing, especially for more expensive products).

For merchants and even service providers, however, it has become a competitive and regulatory minefield mainly due to the huge success of BNPL in America but also Europe (James Ledbetter provided a good overview in the New York Times).

So, why did we pick this as a trend? Because oftentimes, seemingly chaotic market changes can lead to disruption and innovation, especially since BNPL is popular among consumers and therefore still has a strong business case. It will be very interesting to see how the service providers for BNPL or even new players will develop their solutions amidst the (now fortunately waning) inflation and increasing calls for regulations. We will definitely keep an eye on this topic.

Digital Wallets

Although the term can be interpreted in a few different ways, a digital wallet usually is an app that stores payment details (e.g. from your debit or credit card provider) and usually makes it much easier to pay in-store but also online. E.g., in store, you could easily pay by swiping your smartphone over the payment gadget of the store. Online, you can usually forego a lot of time-consuming data forms by simply logging into the app (if the merchant enables it) which then provides the merchant with the card, invoicing and delivery information.

Security measures are usually touch, fingerprint or face ID for smartphones and two-factor authentication for desktop apps. Furthermore, the card details themselves are not stored in the app, so you can keep your card safely at home.

In many countries, digital wallets are already quite popular and can vary a lot depending on the country and its relationship with digitalization. For example, Apple Pay has been widely used in Scandinavian countries, whereas German consumers flock to PayPal. However, depending on your core markets, it – pardon the pun – pays to research the most popular methods and offer them in your online shop. 

Mobile Payments

The cousin of digital wallets and a big contender for the most influential payment trend 2024 are mobile payments. Paying with your smartphone or even your smartwatch (or tablet if you don’t mind the awkward handling) has been slowly gaining traction in the EU.

In contrast to the digital wallet – which can also be used without a smartphone or mobile device – mobile payments are truly connected to a mobile device that acts as a replacement for cash or physical credit cards. As such, a digital wallet can include mobile payments but not exclusively.

As of now, mobile payments are still more of a niche payment method for many Europeans but remember that different countries might have completely different attitudes towards it. Overall, the European Central Bank reported in 2022, that only 3% of all payments were made via mobile apps. But the Danish Nationalbank reports that one out of five payments in physical trade is made via mobile phone. Localization matters.

It’s also very likely that more and more people will adapt mobile payment the more it is offered. It’s truly a chicken/egg question whether some payment methods are not as popular because consumers don’t like them or because they’re not offered in the first place. The Billwerk+ motto is always to provide relevant and consumer-friendly options, so they can choose.

Localization

In my opinion, local payment methods are crucial to success as a merchant. (Jeanette Ravnbak, Sales Executive at Billwerk+)

At Billwerk+, localization is a big topic that we often talk about but it is worth repeating because any company that has ever tried to expand to other markets knows how challenging it can be due to different economies, cultures, infrastructures and customer behaviors. With the many advantages of the digital transformation and its global potential, companies need to be aware that there’s no “one size fits all”-solution.

From different payment regulations to data security topics up to consumer preferences for specific payment methods – localization is key to unlock a market’s potential and it’s often a question of culture.

For example, to move into the Scandinavian markets, it is quite possible to keep an English website and offer state-of-the-art payment methods. But as very digital countries, they do have their own versions of mobile payments and digital wallets, so it could make a big difference to not just offer PayPal and Apple Pay but also MobilePay etc.

For France, the majority of French consumers will prefer a website in their own language and they prefer to pay with credit card but also use online payment services.

And for the German market, not only would you need German websites but also offer more traditional payment methods since German consumers are still clinging to their debit cards and on-bill-payments. In fact, a report from 2021 by the Deutsche Bundesbank stated that only 3% of German consumers use mobile payments (however, it is more than likely that this number has increased in the last two years).

Intelligent acquirer routing

The right acquirer choice can have a big influence on the overall revenue which is why intelligent routing is incredibly valuable as many payment gateways don’t offer it in the first place. To be able to route transactions to different acquirers to get the best rates on different schemes can be a gamebreaker, especially for larger merchants. (Jeanette Ravnbak, Sales Executive at Billwerk+)

Let’s take the opportunity and talk about our very own trend topic. Since our payment gateway is acquirer independent, which means that our customers can pick and choose their own acquirers (and we support them, if they need the help), it offers a lot more independence to find the right combination of acquirers for different markets and rates and thus making, as they say, “more bang for the buck”.

Intelligent acquirer routing is a way to make this even easier by automatically compare fees and select the best acquirer(s) for optimized fees. As those fees can easily add up, our customers can save a lot of money over the year.

EBICS

EBICS have some big advantages for companies, including direct control, independence from third-parties, reduced costs, and security. (Benjamin Knierim, Senior Sales Director at Billwerk+)

The Electronic Banking Internet Communication Standard (EBICS) is a German transmission protocol that helps sending payment information between banks over the internet. It is actually mandatory for German banks but also has been adapted in France, Austria and Switzerland.

EBICS essentially provide a safe communication channel for SEPA direct debits and credit card transfers via the internet. Now, EBICS themselves aren’t new but they are a hot topic nonetheless (just like Batman) and an EBICS interface can offer companies new options for their payment processes. 

Cyber Security & Trust

Anyone even remotely interested in tech news has read about the stark increase in cyber-criminal activities, nowadays also enabled by the use of AI and automation. From fraud to phishing up to hacking for ransom, many cyber-attacks have led the tech news this year. 

For companies, this means that they need to make sure their payment solutions are up to all security standards and maybe even provides features that can further secure payment data such as credit card tokens.

Another side-effect of these cyber-attacks is that companies need to make sure to enable their consumers (e.g. by informing them about phishing emails and creating processes that can’t be easily confused with malware) and also avoid suspicion due to gaps in the user experience.

According to a Radial study from 2023 almost every second consumer would abandon their online cart if they feel that the company asks too many sensitive questions or seems to lack website security.

Sometimes, these feelings are based on simple things such as a lack of seamless branding. Oftentimes, consumers can get confused when a checkout section looks widely different from the rest of an online shop. A native inclusion of the payment gateway generates more trust.

Be on top of all payment trends with the Billwerk+ Pay payment gateway. We offer more than 50 payment methods, are based in Europe and enable an easy and intuitive onboarding.

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