Looking back at changes in digital payments this year

Year in review: digital payments shift impacts how people pay

As digital commerce increased around the world, our mission to help your business and merchants take advantage of new opportunities grew. When we asked our customers in early 2022 how they’ll be shaping their payment strategy, they overwhelmingly pointed to digital payments transforming how their company does business. As the year progressed, we saw the magnitude of just how payment innovation can have a positive impact on companies and consumers across geographies and industries.

Geographies switch on to mobile payments

Across the globe we’ve seen geographies shift their focus to increasing digital payments both in the private and public sector. Our efforts have enabled customers to bring forward their mobile and digitization agendas. In the UAE new initiatives such as National Digital Government Strategy, and the National Strategy for Digital Transformation in Saudi Arabia are driving digital payments for their citizens.

Across each region merchants and financial institutions are examining how these digital-first strategies can drive business. According to the Mastercard New Payments Index, 95% of consumers in the Middle East and North Africa (MENA) are considering emerging digital payments such as wearables, biometrics, digital wallets and currencies, and QR code, in addition to Contactless. It revealed 88% of MENA consumers have access to more ways to pay compared to 2020, while 3 out of 4 MENA consumers said digital payments methods helped them save money.

Mobile enables growth for the lifeblood of our economy

Through the past few years, we’ve seen small and micro businesses play a vital role in powering economies. As small businesses navigate this changing digital world, our customers continue to realize how crucial it is their SME merchants have access to the right insights, technologies, and solutions to grow and scale.

Customers including MCB Bank and others this year launched their own small business payment gateway through Simplify Commerce. This solution benefits small businesses who want to build their own webstores without coding knowledge, use advance payment options such as e-invoicing, integrate with social media, take informed business decision using the powerful reporting module or build payments into existing websites with hosted payment or shopping cart payment plug-ins.

For merchants that need the added flexibility of a mobile POS, or that can’t afford a hardware solution, like the burgeoning number of micro-businesses , Tap on Phone is a great opportunity. In the Middle East and Africa, our partner Network International launched a partnership to support 500,000 merchants and SMEs with Tap on Phone technology which allows the phones in their pockets to act as payment terminals. Now as the year draws to a close, Tap on Phone is live with five industry leading acquirers across the region with over 40,000 terminals activated to help micro-merchants grow their business.

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Speed and security at checkout lead to consumer conversion

Businesses that can offer a quick and reliable way to pay will see their customers returning time and time again. Click to Pay is a method that provides a single button and standardized flow across participating card schemes. An intelligent, password-free online guest checkout option, it provides a quick and easy experience on any device.

Across the globe we see customers address merchant needs and consumer expectations for a faster, easier and seamless checkout with Click to Pay. Gulf Bank of Kuwait (GBK), one of the leading banks in Kuwait recognized the need for its merchants to benefit from frictionless online checkout technology and are launching the first embedded Click to Pay experience within Mastercard Payment Gateway’s Hosted Checkout. ??

Together this enables merchants to improve their approval rates by up to 3ppt using sophisticated tokenization technology and increase conversion rates thanks to the enhanced user experience with Click to Pay.

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Industry step change in digital fraud technology

Another move in the digital ecosystem top of mind for payment players across the globe was the move from 3DS 1.0 to EMV 3DS 2.0 in October 2022. The new standard offers a great user experience across devices with frictionless authentication, lowering checkout disruption and cart abandonment. For merchants this can mean greater revenue and customer satisfaction, and for issuers and acquirers’ greater volumes of transactions.

Now, just a few months on, markets with EMV 3DS (2.0) are enjoying higher authorization rates over 3DS 1.0 by up to six basis points according to global Mastercard authorization data, with the potential for incremental benefits to continue

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Driving better innovation across sectors

The payment industry does not stand still. Our ability to solve challenges and exceed consumer expectations won’t depend on the technology of today. Instead, it’s looking forward to tomorrow, which is why with customers, we’re continuing to innovate.

With customers such as Vodafone , we’ve helped enable their Economy of Things platform, where they’re piloting faster payments from electric vehicles, with autonomous, secure payments at charging points that put the consumer in the driving seat

And internally our Mastercard Innovation Program, Sandbox is helping to inject fresh ideas – by identifying new solutions, process improvements, and partnerships into Mastercard roadmaps to drive customer success.

Now with 2022 nearing it’s close, we look forward to 2023 and the opportunities, partnerships, and uncharted growth we can achieve together.?