By Douglas Hall, Publisher, PaymentsNEXT
Discover’s 2024 Payments State of the Union highlights risks and opportunities
In today’s fast-paced digital economy, slow payments and rampant fraud are not just inconveniences; they represent significant hurdles that can stifle growth for merchants and negatively impact consumer loyalty.
Discover’s new 2024 Payments State of the Union survey paints a stark picture of these challenges while highlighting key opportunities for industry professionals to take action.
Consumers want instant payments and more security
In the past 90 days, 73% of consumers used instant payments, expressing the desire to use them for real-time bill payments (82%), real-time business payouts (80%), and real-time account transfers (72%).
Consumers want better fraud controls (38%) and the ability to make or receive instant payments (37%). When they try a new payment experience, 51% say security of their personal information is important, followed by ease of use (33%) and convenience (30%). Notably, 71% of consumers are willing to take extra steps to increase security for login or checkout.
Merchant payment perspectives
The Discovery study shows merchants share similar concerns. 75% see improving fraud prevention and a wider variety of payment options for consumers (75%) as critical to their success.
Tap-to-Pay on mobile (93%), instant payments (92%) and digital identity (88%) are technologies merchants say provide the most value to their business.
Merchants said reducing fraud and chargebacks (38%) is a top business payment priority in the next two years. Among the top fraud challenges in the past two years were payment fraud (34%), new account fraud (27%), friendly fraud [customers disputing legitimate purchases] (26%), and bot attacks (26%).
Fintechs tracking consumer and merchant demand
Merchants (49%) and consumers (39%) represented the biggest growth opportunities according to fintechs.
The most significant payment initiatives for fintechs include fraud prevention (92%), payment data security (92%), commercial/B2B payments (90%), and instant payments (93%). Instant payments were also cited by 93% of fintechs as a vital emerging payment use case.
Like practically every other business, 44% of fintechs said AI is a topic of deep interest, while 50% of fintechs want to leverage AI for fraud prevention.
Navigating consumers, merchants & fintechs
“Fintechs walk a tightrope between consumers who expect instant and convenient payment experiences and merchants that demand seamless integration and security,” said Jennifer Cruz, Vice President of Payment Strategy at Discover. “As a leader in financial services and in our fourth year of surveying thousands of decision-makers within the payments ecosystem, this study should help fintechs with their persistent balancing act.”
Researchers surveyed 1,067 fintech vendor respondents in VP, C-suite and founder roles, 2,258 merchants in senior payments/finance and strategy roles, and 5,030 consumers in the US, Canada, Brazil, Ecuador, Mexico, China/Hong Kong, India, Japan, Singapore, UK, Germany, South Africa, and Spain.
A detailed research summary is available from Discover here.
About the Author
Douglas Hall is the CEO and Founder of EQUE Corp, an innovative e-commerce fraud prevention service that uses dynamic CVV technology to create “person present” transactions, eliminating card-not-present and friendly fraud and significantly reducing false declines. He is a prominent leader in the global payments industry with decades of experience in finance, a serial entrepreneur, and the publisher of PaymentsNEXT.
Recent PaymentsNEXT news:
4 Reasons Why You Should Ditch Your Debit Card This Holiday Season (and permanently)