Voice of the Industry

Payments set to get the Hollywood treatment in 2022

Wednesday 19 January 2022 07:39 CET | Editor: Anda Kania | Voice of the industry

Jacob Morgan, Principal Analyst at Forrester, casts his predictions for the payments sector in 2022, analysing the latest market trends

In 2021, the pandemic had a powerful impact on the payments industry, thanks to both its position at the heart of rapid business digitisation and to the online shift of commerce. As companies lock in the benefits of digital payments, pivot to B2B payments innovation, and pursue further consolidation in the payments space, that growth will continue apace through 2022. 

In 2022, we predict that blockbuster IPOs will light up the headlines while consumers experience a ‘Back to the Future’ moment, as digital wallets and QR codes reenter the spotlight. Here’s a peek at the script and who may steal the spotlight in the year ahead.

Blockbuster IPOs. Two payment superstars will IPO or direct-list on either side of the pond, one with a 12-digit dollar valuation. This will put the investor spotlight back on the payments sector and – as there are a few other large players waiting in the wings for now – 2022 will set a high-water mark for payment firm IPOs for some years to come. Funding will likely reach record levels in 2022, topping USD 40 billion. 

‘Buy now, pay later’ – the sequel. 2022 will be the year we will see incumbent banks execute defensive moves and make their own technicolour versions – or buy out the studios of their fintech rivals. Fintechs will focus their merchant-selling strategy on value-added services and alternative distribution networks. Regulators, especially in Europe and Australia, will bring new protections for consumers and compliance hurdles for providers.

Sleeping B2B beauty. The prince of innovation finally kisses B2B payments, and 2022 will turn into a ball of fairytale proportions. Forrester predicts that B2B ecommerce will reach USD 1.8 trillion in the US alone by 2023. Making this all work like a dream will drive innovation and revenue growth, while the B2B segment will become a top priority.

Where’s my wallet? The QR code and digital wallet get top billing. 2022 will see a mash-up of preexisting innovations and technologies, but delivered with a new sense of purpose, as their time (and usefulness) has finally come. With the convenience of embedded biometrics, the pandemic was just what the wallet needed for QR codes to shimmer too across order-from-the-table solutions, vaccination passes, and COVID check-in tools.

High noon at the P2P corral. P2P and C2B have always been on a rocky road for banks, and in some Western countries, the wheels will finally come off the wagon in 2022. Market-dominating fintechs prove too strong for banks’ homegrown P2P initiatives, which will resort banks to switch to partnerships and consortium ventures.

The year ahead promises to be an action-packed blockbuster for the payment industry, so grab your popcorn and take your seat to find out which stars will have their names in lights, and which firms might find things turning into a ‘Rocky Horror Picture Show’. 

At Forrester, we intentionally make bold, but grounded-in-fact calls to challenge the market rather than turn out endless sequels. We’re also accountable and fully transparent, scoring predictions at the end of each year to see where we hit the mark and where we didn’t, as markets dynamics will change. We’ll soon find out whether our box office predictions earn us a place at the 2022 Academy Awards or not. 

About Jacob Morgan

Jacob serves digital business professionals, helping them understand and respond to the challenges of digitizing their business strategy as well as understand how culture, technology, and organisational change can help accelerate transformation and innovation. Jacob advises digital business leaders on how to drive forward their digital agenda within financial services and other verticals, with research exploring digital business strategy, evolving collaborative business models, API business strategy, open banking, consumers, digital and mobile payments, as well as emerging disruptive trends. 

About Forrester

Forrester is one of the most influential research and advisory firms in the world. Our proprietary research, consulting, and events empower leaders across technology, marketing, customer experience, product, and sales functions to be bold at work – accelerating growth, navigating change, and putting customers at the center of leadership, strategy, and operations.

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Keywords: BNPL, digital payments, B2B payments, e-wallet
Categories: Payments & Commerce
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Countries: World
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