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What lies ahead for payments, commerce

Maurice New
THE pandemic has been a focal moment for driving transformation in the world of commerce and payments. While uncertainty and unpredictability are now expected, one thing that is clear is that the future of money is digital. The pandemic accelerated change, but we have seen a permanent behaviour shift to digital that is set to last far beyond. In this article, Maurice Newa, the managing director for Southern Africa at Visa discusses upcoming trends for 2022.

In the year ahead, the following trends are the ones to watch:

Embedded finance: open innovation has made once complex and expensive banking infrastructure much more accessible, allowing any company to become a fintech.

  • Green payments: consumer awareness and appetite for sustainable products have never been higher, following the culmination of the COP26 meeting.
  • The Metaverse: creating a new shared space between different digital worlds, blending virtual and augmented reality, presents enormous opportunities.
  • Buy Now Pay Later: following another year of rising eCommerce adoption, consumer interest in instalment-based solutions has rapidly increased.
  • Crypto goes mainstream: another fast-growing 2021 trend that will become even more prominent this year is the integration of crypto into mainstream financial services.
  • Open banking: while data is a key ingredient in a truly personalized offering of financial services, it is paramount that consumers can share sensitive information with third parties in a more secure manner.

Securing the future of money
An undeniable trend in the world of payments since the onset of the pandemic has been the proliferation of digital commerce. With the shift online, however, there are also now more avenues than ever for cybercriminals to commit payment fraud.

To combat the fight against fraudsters, this year we will see the proliferation of some extraordinary, best-in-class security practices that will change the game.

  • Biometrics will become the default form of authentication: with an increasing number of customers feeling comfortable with the technology, biometric payments are here to stay.
  • Manually addressing the rise in enumeration attacks will no longer be adequate: the diversification of digital payment options creates optionality for both consumers and fraudsters. Ensuring the safety of online channels will be a challenge that issuers and merchants must tackle together.
  • Interest in crypto will continue and the sector will mature with regulation appearing as cryptocurrencies continue to gain popularity fraudsters too are following the money and despite their popularity this still nascent sector will need regulation and payment security protocols to safely thrive.
  • Issuers and merchants will team up to tackle first-party misuse: first-party misuse is a time consuming and costly process for merchants and can lead to lower approvals. Solutions are possible but they will require cooperation across all parties in a transaction.
  • Companies will invest more money into business continuity and risk management: the pandemic highlighted the importance of planning for business continuity in the event of disruption and may put such plans through a rigorous test. Looking forward, more companies will adopt and adapt these plans.

Southern Africa’s year of recovery
The diverse economies that make up the Southern Africa region are expected to continue to recover this year, maintained by the easing of government restrictions, return of consumer mobility, rebounding economic activity, the progress of vaccination campaigns. Southern Africa is experiencing digital financial transformation powered by the changing consumer and retail trends. The advent of the Covid-19 pandemic and border closures has also aided the acceleration of digital payment volumes and e-commerce. Even with borders opening up, digital e-commerce payments have continued to grow. We are experiencing strong digital growth in Mozambique, Zambia, Zimbabwe and Namibia.

Mobile wallet continues to tremendously grow with the mass market consumers joining the digital payment rails such that digital payments are no longer a nice-to-have but a must-have and are a key part of every company’s business strategy.

As the world leader in digital payments, we have become the connective tissue to enable new payment and commerce experiences by innovating new digital payments systems including Fintech/MNO companion card partnerships, Buy now pay later (BNPL), Tap to phone and Fleet management. The widening digital payment space offers an opportunity to build partnerships, to provide secure and reliable financial services to meet the ever-changing needs of clients and consumers in Southern Africa.

  • Newa is the managing director at Visa Southern Africa.

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