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Open Banking, Payments

Five key trends to consider when integrating digital payments into fintech innovations

Consumers are embracing digital payments and turning to fintech for everyday finance needs. According to Mastercard’s 2022 Global New Payments Index, emerging payment methods like account-to-account payments, digital wallets and Buy Now, Pay Later are all on the rise. Eighty-five percent of consumers have used a digital payment method within the last year. And 93% are likely to use a digital payment method in the coming year.

Many of these emerging digital payments are powered by open banking and are a natural progression of the shifting landscape of payments. Through our latest research, we wanted to share five key trends to consider when integrating digital payments into your fintech innovation.

1. Consumers want convenience when paying bills

Consumers across the globe are relying on digital channels for paying bills because it is more convenient and makes it easier to manage finances.

Subscriptions, bills, utilities, loan repayment and retail payments are more convenient with open banking-powered apps and services. Eighty-one percent of consumers have already heard of account-to-account payments, but they may not know that open banking added speed and convenience to A2A, or that A2A payments can now be made at the point of sale, without typing in card details or writing checks.

2. Consumers seek flexibility in making payments

The majority of global consumers want the flexibility and control to optimize digital payments. Similar to the motivations around bill pay, consumers are connecting their accounts to automate repayment for BNPL and installment loans. Fifty-eight percent of consumers are open to connecting their bank account to other financial services to enable automatic repayments, and 52% percent say that they use digital repayment tools because they help to prevent missed or late payments.

3. Security is top of mind

Consumers recognize the convenience that digital payments offer, and security remains a top concern, highlighting an opportunity for providers to build trust. Building comfort with emerging digital payments is key to supporting future adoption as the two trend together. Faster transactions, convenience and transparency are the top reasons that help consumers overcome security concerns.

4. Consumers rely on fintech to manage finances

Consumers are relying on fintech, and indirectly open banking, to accomplish everyday financial tasks. Eighty-three percent of consumers have used digital tools for at least one financial task, and over half use technology to accomplish five or more tasks. The majority see making a payment as the most beneficial use case.

5. Emerging payments are strongest among Gen Z and Millennials

Younger generations have gone more digital in their purchasing and payments behavior globally and it’s anticipated that their use will continue to increase. These generations are less likely to make in-person purchases and payments: 50% for Gen Z compared to 78% of Boomers. They are also less likely to use cash for purchases. While security remains a concern for them, it is less heightened than for older audiences.

Building the Future of Payment Choice at Mastercard

At Mastercard, we have always powered experiences that enable customer choice. Our solutions are built to meet consumers’ financial needs and designed with security at the center.

In recent years, we have further differentiated Mastercard in the market by diversifying beyond the card. We’ve built a complementary open banking platform that enables ACH and account-based payments with best-in-class capabilities across infrastructure, applications and services. Empowering people to pay and get paid using a card, bank account, cryptocurrency, or even cash. Using any device or no device. In real-time or later, truly empowering people with flexibility and control.

Click here to download the full Global New Payments Index for a deep dive into emerging payment areas including digital payments, account-to-account, cryptocurrency, open banking and BNPL, among others. 

Certain open banking solutions are provided by Finicity Corporation, a Mastercard company.