What’s Ahead in 2024 – Encoded’s Top Three Predictions for Payments

Wearable payment technologies have increased in use over the past few years, providing consumers with convenience, security, and speed. This is thanks to the increasing adoption of biometrics for identity authentication, wearable devices in general and the integration of these devices with digital wallets.

Wearable payments are more convenient than many other mobile payment methods. Storing a customer’s payment information, protected by a passcode or biometric authentication, such as a fingerprint or face recognition also increases payment security. Soon it will be possible to verify a payment without even pulling out a ‘phone. Simply placing a fingerprint on your watch will be enough for the payment to be approved. It eliminates the need for a passcode or PIN, making stealing payment information more difficult for hackers or fraudsters.

So, looking to 2024 – prepare to pay from your smart watch or other devices and enjoy the ease of wearable payments.

Original Credit Transaction (OCT), services such as Visa Direct and Mastercard Send, means that card networks are providing merchants with a flexible new option for processing refunds and other outbound payments.

OCT is a special transaction that “pushes” funds directly into the account associated with a particular credit, debit, or prepaid card number, so long as the card issuer has enabled it to receive faster fund transfers.

For merchants to be able to submit OCT transactions, two things are required. Firstly, an acquiring bank that offers Visa Direct and/or Mastercard Send, and secondly a payment gateway that can handle OCTs. OCTs will put funds back into the user’s account much faster than a normal credit transaction, providing better customer service.

Merchants should take advantage of new options like these to provide a more positive experience, have a differentiator, and help to keep customers loyal.

One of the benefits of a payment orchestration layer is that merchants can rely on securing the most competitive rates from different acquirers for transactions at any given time. For some merchants operating in high-risk markets, for example, travel and tourism or where there may be risks in their supply chain (such as the construction industry), they can choose to spread the transactions across multiple acquiring banks.

This reduces the risk for each of the acquirers, who otherwise may charge a high deposit to underwrite the transaction amount. In such instances a merchant could lose out on valuable interest from their capital sum which is sitting in just one acquirer’s account as a financial guarantee.

Payment orchestration provides more flexibility for the merchant, reduces both the risks in payment flows and the cost of capital outlay. It dynamically routes payments, integrating with a variety of card issuers, card schemes, gateways and Open Banking. This means merchants benefit from the best terms and rates. Customers also benefit from more ways to pay and, faster, frictionless transactions.

The question for 2024 is not why should you choose an orchestration platform, but when?