Retail-Tech Landscape: Payments

Digital payment services are of paramount importance in the customer experience journey, impacting sales conversion and brand loyalty. The industry spans a broad range of solutions, from checkout experiences and fraud prevention solutions to digital wallets and cryptocurrency. Fueled by increasing e-commerce penetration, the global transaction value for digital payments is set to increase from $7.86 trillion in 2022 to $10.7 trillion in 2025—a CAGR of 10.9%, according to Statista. This Retail-Tech Landscape covers selected startups globally whose technology solutions support brands and retailers in improving their payment operations and infrastructure. We have identified 40 startups and companies across the following categories:

• Buy now pay later (BNPL)
• Checkout experiences
• Cross-border payment solutions
• Cryptocurrency and digital assets
• Digital wallets
• Payment gateways and processors
• Payments-linked loyalty/reward services
• Risk management and fraud prevention
• Subscription management solutions

Payments Trends in Retail Below, we highlight two key industry trends in payments. 1. Cryptocurrencies Are on the Rise as the Metaverse Expands We identify the emergence of metaverse as a key global retail trend for 2022. Coupled with the decentralized nature of blockchain, the expansion of the metaverse is leading to a rise in digital asset ownership and the use of cryptocurrencies as a payment method, which is not going unnoticed by retail’s major players. Amazon will reportedly launch its own cryptocurrency in 2022, which will enable payments via “Amazon Crypto Token” for purchases on its website. Furthermore, Google formed a partnership with digital asset marketplace Bakkt in late 2021 to pave the way for crypto acceptance in its Google Play app.

• Interested in the technology innovations used to build digital worlds? Read our recent metaverse Retail-Tech Landscape.

2. Inflationary Pressures Are Fueling Deferred Payment Demand We expect payment for purchases with tailored and flexible BNPL plans—even for small-ticket items—to be one of the fastest growing payment trends in 2022. BNPL saw major popularity during the pandemic, which can be attributed to increased e-commerce shopping as well as surges in unemployment and uncertain financial conditions. This demand has persisted, and will likely increase amid inflationary pressures: During Cyber Week (November 23–29, 2021) alone, the use of BNPL jumped by 29% year over year, according to Salesforce data. We expect more retailers to introduce BNPL services as a payment method to keep up with demand and boost sales—BNPL can deliver 20%–30% higher conversion rates for merchants and 30%–50% higher average ticket sales, according to Deirdre Cohen, SVP and Head of Acquiring at Visa.

Retail-Tech Landscape: Payments—Infographic

 

Retail-Tech Landscape: Payments, by Category

BNPL: Companies enabling consumers to split payments into smaller chunks and pay in installments following a schedule plan, usually free of interest. [wpdatatable id=1781] Checkout Experiences: Companies focused on delivering user-friendliness for checkout experiences, including one-click, contactless and automated checkout solutions. [wpdatatable id=1782] Cross-Border Payment Solutions: Companies helping businesses to send and receive money overseas and support payments in global currencies. [wpdatatable id=1783] Cryptocurrency and Digital Assets: Companies enabling merchants to accept payments in digital currencies and companies with marketplaces for trading digital currencies and assets. [wpdatatable id=1786] Digital Wallets: Companies enabling digital payment methods, including peer-to-peer payment via a QR code or phone number. [wpdatatable id=1787] Payment Gateways and Processors: Companies enabling merchants to accept payments from different networks and providing API integrations for e-commerce websites. [wpdatatable id=1788] Payment-Linked Loyalty/Rewards: Companies providing payment-linked loyalty programs that incentivize purchases by linking consumers’ loyalty cards to mobile apps and awarding loyalty points for payments. [wpdatatable id=1789] Risk Management and Fraud Prevention: Companies offering security, fraud prevention, account authentication and chargeback management solutions through analytics, ultimately help merchants to maximize revenue. [wpdatatable id=1790] Subscription Management: Companies helping merchants to better manage recurring payments and collection for memberships, classes, services and subscriptions. [wpdatatable id=1791]