The payment industry is experiencing some advancements that make transactions simpler, faster, and more accessible. New technologies like digital wallets, cryptocurrencies, and CBDCs are here to offer convenience and security in payments. Reflecting this shift, the global payments market is projected to grow at a CAGR of 10.5% through 2029, reaching $4.78trn. And as these trends unfold, they will reshape the way people and businesses handle money worldwide.

So, what changes will drive the future of payments, and how will they impact us?

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Digital wallets

People nowadays highly value convenience and speed, so it’s no surprise that digital wallets like Apple Pay or Google Pay are essential in daily life. Just one simple tap, and the transaction will be completed in seconds. Digital wallets also open financial access for unbanked populations, allowing them to participate in the global economy. According to the World Bank, mobile wallet adoption in emerging markets has increased financial inclusion, increasing account ownership from 63% to 71% between 2017 and 2021.

Also, according to Statista, in 2023, digital wallets accounted for around half of all e-commerce transactions and $13.9 trillion in global transaction value. These numbers are only expected to increase with projections stating that digital wallets will account for more than $25 trillion in global transaction value, or 49% of all sales online and at POS combined.

A2A payments

In countries where governments have invested and supported the development of convenient transaction methods, we can see how A2A payments are thriving. They enable real-time bank-to-bank transactions and bypass traditional card networks. For example, in the Netherlands, A2A accounted for 64% of e-commerce transaction value in 2023, and in Brazil, it’s expected to account for 50% by 2027.

Crypto and blockchain

Cryptocurrency is no longer just a speculative investment but a legitimate method for transactions. Blockchain technology, the underlying framework of cryptocurrencies, provides faster, cheaper, and more transparent transaction processes. So, unlike traditional banking systems, which may take days to settle transfers, blockchain-based transactions can be completed almost instantly with minimal fees.

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People, seeing all the benefits of cryptocurrency, are increasingly adopting it, and with over 560 million people worldwide owning cryptocurrency as of 2024, crypto payments are moving closer to mainstream adoption. For instance, Deloitte’s survey found that 64% of consumers would like the option to pay with cryptocurrency, and over 75% of retailers are considering integrating crypto payment options in the near future.

Nations like El Salvador and the Central African Republic have already adopted Bitcoin as legal tender, while others are leveraging blockchain for remittance payments and other applications. Also, according to the latest news, 3 US states — Colorado, Utah, and Louisiana — already accept crypto for payment, and now, Detroit is to become the largest city in the US to accept them as well.

Stablecoins

Stablecoins, especially USDT and USDC, are leading the way in everyday crypto transactions and payments. Their popularity is mainly due to increasing regulatory pressure on traditional banking and payment systems. The key moment came when, in late 2022, it was revealed that USDT had surpassed Visa and Mastercard in transaction volume. This made Visa and Mastercard to shift their focus toward crypto payments.

In November, there was a surge in stablecoin balances, reaching a yearly high of $41bn, which shows a strong influx of liquidity into the digital asset market. This growth, led by Tether’s USDT and Circle’s USDC, has added over $5 billion within a week of the election. Now, USDT’s market cap has hit a record $138 billion, and USDC has grown to nearly $40 billion. Also, since the US presidential election, Tether Treasury minted approximately 13 billion USDT and transferred most of the tokens to centralised exchanges.

This once again highlights the increasing role of stablecoins as essential tools for crypto transactions.

CBDCs

CBDCs, or central bank digital currencies, are also largely gaining popularity. They are one of the most significant innovations in payment technology as they offer digital versions of national currencies. Unlike cryptocurrencies, which are decentralized, CBDCs are government-regulated, so they provide a stable digital currency alternative with the backing of central banks. CBDCs enable faster, lower-cost international transfers, reduce dependence on intermediaries, and enhance transparency in financial transactions.

In 2024, more than 130 countries, or 98% of global GDP, are exploring CBDCs, and several countries have already launched their own coins. China’s digital yuan, for example, has already processed transactions worth close to $1 trillion.

Conclusion

So, despite economic uncertainties like geopolitical tensions and fluctuating interest rates, the payments industry remains resilient. It keeps progressing and expanding, fueled by technology and shifting consumer preferences. For companies in the industry, it is essential to stay competitive while keeping pace with these trends. For consumers, understanding these changes is key as the world is increasingly digital.

The future of payments promises to break down barriers and offer more inclusive and efficient ways to transact across borders.

Georgy Slavin-Rudakov is CMO at all-in-one crypto ecosystem for business B2BINPAY