Top 5 Payment Trends 2024

January 25, 2024 | Expertise
Adam Vissing

A new year has begun, so we asked IXOPAY’s resident experts for their predictions for 2024. It looks like the fallout from Covid-19 - which shook up the market - has settled. 2024 therefore looks set to be a year of evolution, rather than revolution. A number of technologies are reaching maturity and on the cusp of widespread adoption. The result is a far more open payments landscape than was the case only a decade ago, with payments of the future set to be fast, in-app and seamless. Tighter payments integration and a multitude of payment options may be good for consumers, but pose a significant challenge to merchants. This is especially true for global merchants, who need to cater to many diverse markets with different payment method preferences. These developments go a long way to explaining the increased interest in payment orchestration, which has quickly gone from niche term to buzzword, with the hype around it looking set to continue in 2024.

Realtime Payments Coming of Age

There has been a lot of hype recently about instant payments (also called instant or fast payments). While not a new idea, the rollout of FedNow sees the US catching up with markets like the UK, EU and Brazil, and has catapulted the concept back into the public consciousness. Developed by the US Federal Reserve, FedNow gives financial institutions the means to offer instant payments, no longer limited to business hours. Along with the announcement that additional fees for instant payments in the Single Euro Payments Area will be scrapped, we are seeing several barriers to widespread adoption of realtime payments crumble.

With open banking, account-to-account payments and alternative payment methods rising in prominence globally, there are now a wide range of alternatives to traditional credit cards for online purchases. Improvements to the user experience brought about by the open banking revolution and digital wallets mean that realtime A2A payments are now very much a viable payment option.

Being able to receive funds almost instantly upon making a sale will give merchants greater flexibility and security in their financial planning, while also typically being cheaper than credit cards for merchants. Unlike with other payment methods, we may see adoption being driven at a faster rate by businesses rather than by consumers, for example to handle payrolls.

Embedded Finance Goes Beyond Just Upselling

Open banking and its close relative, open finance, opened up the banking and finance markets to fintechs. Embedded finance takes things a step further, with consumer brands now getting in on the act and partnering with financial institutions to offer consumers financial services. This is not a new concept - the idea of selling travel insurance when booking a flight has been around for a long time and BNPL is already well established. But embedded finance opens up new opportunities for brands beyond traditional upselling.

Common examples include brands enticing consumers to pay for purchases directly in the brand’s own app. Functioning similar to loyalty cards, users are rewarded every time they use the app to complete a payment, such as is the case with Starbucks or McDonald’s. Starbucks rewards customers with stars for every payment made via the app. These stars entitle users to additional perks, such as a free drink every 150 stars, free extra toppings upon reaching 450 stars, or a free drink on the customer’s birthday. We expect more and more businesses to set up similar reward schemes. However, smaller businesses may need to partner with technical providers to capitalize on this opening of the market, as catering to regional consumer preferences and local payment methods may otherwise prove challenging.

But embedded finance is more than just in-app payments linked to loyalty schemes. Ride-sharing app Lyft pays out earnings via their own branded checking account, rewarding drivers for using their branded debit card to make purchases. An added benefit of this approach for Lyft is that it discourages drivers from working with competitors such as Uber.

The Apple Card is another example of a branded card using embedded finance to facilitate payments, with Apple partnering with Goldman Sachs to provide the savings account for the card. However, this partnership looks set to end soon, raising questions about the profitability of such ventures. Nonetheless, with embedded finance opening up so many opportunities, we expect to see a diverse and flourishing market that blurs the line between payments, loyalty schemes and upselling related financial services.

Opening Up In-App Payments

Tying in nicely with the move towards more in-app payment options are the changes that will come in the wake of the EU’s Digital Markets Act. The DMA includes many provisions targeting Big Tech, but from a payments point of view, the most interesting development is the opening up of in-app payments. Until now, most in-app payments needed to be processed via the platforms themselves, which led to several high profile court cases in the US involving Epic Games (the makers of Fortnite) and Apple/Google.

The DMA will allow app developers to process in-app payments using the PSP of their choice, bypassing the hefty commission the platform providers charge. This will give developers more options, and let them decide whether the overheads of implementing their own payment processing is worth it. Smaller vendors may decide that the payoff is too small, but for larger vendors (such as Epic Games), the cost savings from bypassing the “platform tax” will far outweigh the cost of integrating their own payment processing.

One of the big challenges facing developers will be integrating a payment solution that caters to the global app market, with consumers in different regions expecting different payment methods. There are opportunities here for large PSPs who cover many markets as well as payment orchestrators like IXOPAY to step in and deliver a single solution that caters to all a vendor’s markets.

Network Tokenization - Improved Customer Experience on the Cards

The introduction of network tokenization is another evolutionary development that will improve the customer experience and make life easier for merchants. Tokenization is an established security mechanism that protects sensitive data like credit card numbers.

Instead of storing credit card details directly, merchants simply store a token - a random sequence of characters - that references the credit card details stored in a secure vault. Whenever the merchant needs to process a transaction using a stored credit card, the token is sent to the payment provider who can then look up the actual card details. However, credit cards expire, which means that this stored data has a limited shelf life.

Network tokens solve this problem. Issued directly by the card schemes, card details are simply updated by the schemes whenever they change. This ensures that merchants can continue using the same token to process card payments - such as for subscriptions or return customers - without needing to deal with the hassle of payments being declined due to expired credit cards. For consumers, this means they will not need to provide multiple merchants with updated card details whenever they receive a new card.

Payment Orchestration is Becoming Mainstream

As the payment landscape opens up with a multitude of payment methods and different consumer preferences per region, payment orchestration is becoming something of a buzzword. This is obviously close to our hearts at IXOPAY. Having entered the payment orchestration business a decade ago - back when it was still a niche concept - we have had a front row seat from which to follow developments. We have noticed increased interest in payment orchestration in RFPs for some time. But coverage in industry media was relatively sparse until very recently.

This makes sense: as globalization and digital markets shape the modern world, merchants increasingly need to serve a global customer base and handle cross-border payments. These customers expect to be able to use their preferred payment methods, be it WeChat Pay in China, iDeal in the Netherlands or PIX in Brazil. We expect the hype cycle to gain in intensity in 2024.

However, with payment orchestration drawing so much attention, and more and more PSPs jumping on the payment orchestration bandwagon, there is a real risk of the term becoming diluted. Merchants need to be aware of potential conflicts of interest when looking for a payment orchestration solution. Traditional payment orchestrators like IXOPAY charge a simple flat fee (a few cents) per transaction, no matter which payment service provider actually processes the transaction.

This is in contrast to PSPs, who make most of their money by taking a percentage of each transaction they process through their network. As a result, the earnings from processing payments as a PSP far outweigh those earned from payment orchestration. This incentivizes PSPs to prioritize their own payment solutions, as this is their real cash cow.

IXOPAY strongly believes that true payment orchestration is agnostic, with no one provider preferred over another. Payment orchestration should be about giving the merchant as much choice as possible with the freedom to decide where to route transactions. Even if a PSP offering payment orchestration offers merchants the freedom to route payments elsewhere, there will always be the risk that features will be deprioritized if they do not benefit the PSP’s core business - processing payments via their own network. This does not mean that PSPs do not have an important role to play in payment orchestration. They are at the heart of processing payments, and without them, there would be no payment orchestration. But it does mean that merchants should be aware of this potential conflict of interest. True PSPs will never be completely agnostic, meaning that their priorities and those of their merchants are not fully aligned when it comes to payment orchestration.

If you want to take your payments to the next level in 2024, get in touch with us!


IXOPAY is a best-of-breed payment orchestration platform offering flexible and independent global payment processing options. Fully PCI-DSS Level 1 certified and highly scalable, IXOPAY caters to the needs of enterprise merchants and white label clients, including payment service providers (PSPs), acquirers and independent sales organizations (ISOs). Built upon modern, easily extendable architecture, IXOPAY provides smart transaction routing with cascading, state-of-the-art risk and fraud management, fully automated reconciliation and settlements processing, comprehensive reporting and access to hundreds of acquirers, payment service providers and alternative payment methods.

IXOPAY is trusted by national and international enterprises and has offices in Austria and the USA. The company has grown from 2 to around 160 employees by delivering innovative products and solutions.

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About the Author

Adam Vissing

VP Sales & Business Development

Adam has worked in the enterprise software and high-tech industry for several decades and a has degree in Computer Science & Management. His role at IXOPAY involves helping our clients streamline and scale their global payment processes.