Impactful Trends in Commerce & Payments: 2022 Summary & 2023 Forecast

Commerce and payments are two interconnected spheres that are never stagnant. In 2022, both of these sectors have undergone some significant changes, understanding the nature of which can provide valuable insights into their future development trajectory.

Read ahead to learn which major trends influenced commerce and payments over the course of the past year and find out which new tendencies to expect in 2023.

5 Key Factors That Made the Biggest Impact Last Year

At the end of 2021, experts across the globe were sharing their thoughts on what would be the key trends to drive the evolution of payments and commerce in 2022. Let’s take a look back at how it actually went:

1. The Demand for Contactless Payments Surged

As many have anticipated, a growing number of businesses began to realize how important it is to invest in refining digital payment experiences to keep up with evolving consumer preferences. For some merchants, it meant adding digital wallet options to the checkout page, while for others it involved developing the ability to send digital invoices and online payment links.

All in all, 2022 has confirmed that contactless transactions are what modern customers want to see in the payment mix. Besides, research confirms that this trend is here to stay, with the contactless payments market forecast to nearly quadruple in value by 2026.

2. B2B Payment Digitalization Picked Up the Pace

Although B2B payments digitization has historically lagged behind the B2C sector, it started to gather speed in 2022. Reportedly, 60% of businesses are moving from manual B2B payments to digital ones, with the main reasons for it being:

• Supply chain disruptions related to traditional systems
• Hybrid work environments
• The Great Resignation

One of the top B2B payment digitization priorities in 2022 was accounts payable (AP) automation. With it, approximately two-thirds of companies mentioned that they were able to process payments more seamlessly.

While the B2B payments niche saw a lot of improvement last year, we are yet to reach the tipping point, so more digitization is on the way.

3. The Importance of BNPL Services Increased

In 2022, large BNPL providers, such as Affirm and Klarna, launched physical cards that enable consumers to pay off their purchases over time. What’s more, Apple created its BNPL solution called Apple Pay Later, while Affirm extended a BNPL option for Amazon shoppers in Canada. We also saw issuers like American Express and Citi roll out BNPL options for their cardholders.

Needless to say, Buy Now, Pay Later services are a major trend in commerce and payments. As a result, BNPL is now a $6.2 billion market that is predicted to hit $40 billion by 2030.

4. Connected Commerce Boosted Consumer Experiences

Connected commerce is becoming an integral part of a frictionless customer journey. After all, 73% of surveyed consumers choose to combine digital and offline shopping. This is great news for businesses, as omnichannel shoppers tend to spend 10 times more than customers who stick to a single commerce channel.

Companies respond to the growing demand for connected commerce with state-of-the-art tech solutions. According to the latest surveys, 41.5% of companies invested in the digitization of their customer's shopping experience in 2022.

In addition, many businesses started offering hybrid shopping experiences, such as buy online, pickup in store (BOPIS), with 59% of companies planning to introduce such omnichannel options within the next few years.

5. Data Privacy Regulations Advanced

New technological solutions emerge all the time, and so do the regulations governing them. For instance, in March 2022, the UK’s strong customer authentication (SCA) went into force.

In the US, the Congress considered the American Data and Privacy Protection Act (ADPPA). In addition, no less than 35 states and the District of Columbia introduced or considered nearly 200 consumer privacy bills.

In June 2022, Canadian authorities proposed a new federal privacy law designed to impact businesses, should it go into effect.

Such focus on data privacy regulations was a prominent trend in 2022 and is expected to live on in 2023 and beyond.

Trends That Are Expected to Take the Lead in 2023

Now that we’ve recapped what the key factors shaping the world of payments and commerce were in 2022, it’s time to take a peek into the future. Experts predict that the five seismic trends that will drive progress in these spheres in 2023 are:

1. Social and Live Commerce

The popularity of social and live commerce seems to be the logical continuation of the payment digitalization and embedded finance trends that have been around for a while now.

A critical factor contributing to the appeal of live and social shopping for consumers is the opportunity to buy goods as soon as they see them. Besides, making such purchases is often extremely easy, as an increasing number of businesses are embedding QR codes and payment links directly into social media posts and live streams.

These factors help merchants generate large revenues and make shopping fun and convenient for their clients. This, in turn, attracts more and more interest to this form of commerce and leaves no doubt that we are sure to see a lot more of it in 2023.

2. Tech Innovation

We live in a time when the physical, digital, and virtual worlds merge, which creates plenty of space for tech innovation. In the sphere of payments and commerce, this is resulting in new implementations of blockchain technology, the advancement of real-time transactions, and the evolution of open banking.

With the development of all these spheres happening simultaneously, we can expect even more innovative solutions to arise in the near future, and the year 2023 is sure to be eventful in this regard.

3. Digital Currencies

Many countries across the globe have expressed their desire to go cashless, so digital currencies are gradually moving into the spotlight. 2023 is promising the scope of their use cases to expand especially in such niches as cross-border remittances, loyalty rewards, and digital wallet payments.

4. Biometrics

While biometric authentication isn’t a new concept, it has seen major improvements over the past few years. This progress is expected to launch a new wave of use cases in payments and commerce from 2023 onwards. Some examples of innovative solutions include palm biometrics, facial recognition at brick-and-mortar stores, and iris scanning popularization.

5. Metaverse

The metaverse is still taking its first steps, yet it has already proven to be a powerful tool in B2C relations, enabling companies to build deeper connections with their clients regardless of their physical location.

The latest surveys demonstrate that 1 in 6 companies are planning to set up a business presence in the metaverse in 2023. These figures, alongside the examples of major brands like Benetton, Nike, and NFL entering the virtual scene, make it clear as day that the importance of the metaverse will continue growing.

2022 Has Laid a Strong Foundation for Future Innovation

A lot can change in 365 days, and 2022 proves it with ease. While during the past year economies around the world experienced dramatic shifts, increased inflation, higher interest rates, and significant supply chain issues, there have still been plenty of positive changes and innovative solutions emerging.

In 2023, payments and commerce will still have to deal with the consequences of the past years’ challenges. However, given the rapid technological process and the fast pace of changes, we are sure to see a lot of innovative solutions arise.