##### Visa Consulting & Analytics

## 10 trends set to shape the 2023 payments

## landscape

Our team of advisors used VisaNet data, expert interviews and research to identify key trends we believe will impact the payments landscape in the coming year.

#### Generation Z sets to work

##### Trend #1

Gen Zers – the first generation of digital natives – are becoming more prominent players in payments as they begin entering the workforce, buying homes, applying for credit cards, and opening bank accounts.

Composing nearly one-third of the world’s population, the largest generational cohort, Gen Zers also bank differently than their predecessors did. They are digital and debit first, prefer using payments apps over using traditional cards, take a cautious approach to credit, and have an openness to alternative payment methods.

##### Why does this matter?

For payments players, it is imperative to understand and respond to the forces that shape the views and the aspirations of Gen Z. As Gen Zers become financially independent, this generation will likely be a driving force in the future adoption of new payment methods.

#### Sustainable spending

##### Trend #2

Consumers' lives are becoming inherently interconnected, and payment providers can capitalize on this untapped opportunity. In the world of financial services, there is untapped potential for sustainable banking and payments business models that focus on helping consumers live more sustainable lifestyles. Companies focused on climate first include Tomorrow, Future (FutureCard), and Vancity.

##### Why does this matter?

For everyday financial services businesses targeting everyday people with everyday products, sustainable spending has not been a central focus.

#### B2B goes 3.0

##### Trend #3

Driven in large part by the fintech community, the B2B payments space is changing and at pace. There is recognition that B2B buyers are people first and that they have come to expect people-centered products and services.

In 2023 and beyond, we’ll see a 3.0 version of B2B payments — with consumer-like experiences on both the issuing and the acquiring sides of the B2B payments process.

##### Why does this matter?

As a result, businesses are seeking cost-efficient, digital-first, and fast payment services. Findings indicate that many U.S. small businesses are considering moving from their current banks to pay techs and big techs as they look for integrated solutions.

#### Web3 technologies against fraud

##### Trend #4

Looking past the turbulent cryptocurrency trading markets reveals foundational “web3” technology innovations that businesses can no longer ignore. Regulatory guidance for web3 assets is bound to increase in the near term.

##### Why does this matter?

The increasingly digital banking and payments ecosystems require banks and merchants to implement fraud guardrails. Evolving threats necessitate businesses to move away from conventional fraud-detection processes to novel tools like machine learning.

#### Open banking picks up the pace

##### Trend #7

In just a few years, open banking has gained traction in more than 50 countries. As it becomes better established, it becomes an access layer for a broad range of applications, including real-time payments.

##### Why does this matter?

With open banking gaining real traction, a pathway opens, from open banking to open finance and open data economies.

#### Embedded finance transformation

##### Trend #8

Embedded finance has introduced complexity and opportunity into the digital payments experience for both merchants and banks. Merchants are recognizing the value of embedding digital payments within their intended customer experience.

##### Why does this matter?

The shift towards embedded finance is resulting in more payments being conducted on platforms not owned by traditional players.

#### Gig economy boom

##### Trend #9

In recent years, gig workers have made up more of the world’s workforce. The primary drivers for the shift show a desire for professional flexibility and independence.

##### Why does this matter?

To remedy the disconnect, financial players should identify opportunities to meet gig workers' needs by offering tailored products and services (e.g., earned wage access, early access to paychecks).

#### A BNPL shift is underway

##### Trend #10

The Buy Now Pay Later (BNPL) market landscape has been changing quickly, driven by adoption among younger customers.

##### Why does this matter?

Seamless point-of-sale solutions enabled by card networks and fintechs will have an opportunity to offer new credential-based solutions that can provide a firm foothold in the market.

##### About Visa Consulting & Analytics

We are a global team of hundreds of payments consultants, data scientists and economists across six continents. Our expertise allows us to identify actionable insights and recommendations that drive better business decisions.