Trends in digital payments sector we can foresee in 2022

With technology infiltrating and modifying every part of our lives, it has also influenced how we purchase and make payments. There has been a significant movement toward e-commerce, as well as an increase in digital payments. Also, with a host of technological advancements in a full phase, consumers have an expanding variety of options for spending money fast and easily.

The frequency of using digital payments has significantly increased in the past few years. It is no wonder that India continues to shine as a worldwide leader in the sector of digital payments, which underscores the reality that digital payments are becoming an increasingly more vital part of our daily lives.

One of the most consistent trends that have been gaining importance year by year is the Buy Now Pay Later method which is abbreviated as BNPL. The latest generation of BNPL models lets individuals stretch out their expenditures while still getting what they want when they want it frequently with no interest. However, there is an obvious drawback to this type of payment model. Consumers might get themselves into sticky circumstances and even serious debt if repayments are not managed effectively.

India is the fastest-growing digital payments industry, with a 5x increase in contactless payments in only 5 years, and is well on its way to becoming a significant less-cash economy. To meet expanding customer demand, the number of businesses accepting contactless payments has increased tremendously in the last five years, from a numeric figure of 1.2 million in 2015 to over 8 million today.

Obviously, it is still seen as an emerging trend which surely will see its growth in the upcoming year too. In recent years, the advent of QR codes has opened up a whole new world of contactless possibilities. The codes enable immediate payments by scanning them with your mobile phone, making virtual payments even faster. With all these developments in the picture, it would only be a matter of years until India adopts contactless payments on a broad scale and becomes a genuinely cashless economy.

With the wide usage of digital payments, reward points along with purchases have been adopted by various merchants in order to boost brand engagement and retention which can be foreseen as a trend in the digital payment sector to be set in 2022. With this one's increasing popularity, users can now effortlessly and conveniently redeem reward points, allowing businesses to acquire and attract new customers. But the act of earning credit card reward points varies from one bank to another as well as from one card to another because of the difference in the value set in the respective card by the issuing merchant.

Moving on to the next trend that we expect in 2022 is Blockchain Technology. Although we have seen its true essence during its development phase related to cryptocurrencies, we are set to witness exponential development and its impact in the Fintech industries. Blockchain is an open-source platform that enables the real-time movement of online services among market players.

Using any of the blockchain APIs chosen, one may demonstrate a significant reduction in asset transfer costs and timeframes. It is expected that Blockchain will considerably boost transparency among market participants, therefore leveling the competition. With lots of benefits on the plate, it surely is a trendsetter in the digital payment sector in the upcoming year.

With the top trends and technological improvements in the digital payments sector, we are surely going to witness a great deal of positive impact on India’s economy. This eventually will pave the way to a better future with a lot more developments and innovations that are in pace with the businesses as well as the customers.