The report: Top 10 Fintech & Payments Trends 2024
Published: October 2023
Source: Juniper Research
Why we picked it: Juniper’s Perspective can be a useful corrective to sometimes myopic U.S.-based research, particularly as payments technologies globalize and regulatory bodies around the word align.
Juniper Research is a market research and consulting firm that often focuses on fintech and banking. Its “Top 10 Fintech & Payments Trends 2024” report highlights notable trends for the coming year and beyond.
Juniper highlights the first five, including growth in account-to-account, or A2A, payments, digital currencies, and digital identities, as the most relevant for the coming year. Other trends, such as biometric payments and BNPL for businesses, will have repercussions across the entire ecosystem in 2024 and beyond.
Quotable: “The fintech market is moving into a phase where innovation for innovation’s sake is no longer a viable strategy. Given the economic pressures, and the intense competition in almost all markets, fintech vendors must ensure that their solutions offer genuine progress on key pain points, rather than offering speculative gains.”
• A2A payments will directly challenge card payments across e-commerce in the year ahead, with impact on European markets in particular in 2024.
• More governments around the globe will explore the use of digital currencies, with new use cases in cross-border and B2B payments.
• There will be notable growth in digital identification through wallets and in-store biometric payments.
What we liked: Juniper’s trends cover a lot of ground, from digital currencies and biometric payments to BNPL and digital identity. The end of the report features a summary with links tied to Juniper white papers for each trend, offering a resource for readers who want to dig deeper into key issues.
What we didn’t like: A couple of Juniper’s trends feel lighter than the others. “Using generative AI to transform spending insights” (#3) isn’t much different from the AI and machine-learning solutions many banks are already using. Meanwhile, “sustainable fintech solutions to emerge, as ESG compliance tops agenda” (#6) feels dated as enthusiasm for ESG stumbles.
Things that made us go “Hmm:” These are all notable trends, but the fact that each trend aligns with a dedicated Juniper white paper on that topic raises a question. Perhaps the report was partially curated to align with Juniper’s library of white papers produced over the year.
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Juniper argues payments and fintech trends in 2024 will be driven primarily by economic pressures, an accelerating shift from cards and a renewed search for differentiation. While some global markets are seeing stronger economic growth, many countries are still experiencing strong inflation and upward pressure on the cost of living.
There is also a growing movement to consciously reduce cards’ primary role in payment systems, particularly in Europe where regulators see reliance on international card networks as a structural weakness. Globally, there is also pressure to reduce costs for merchants, and the commoditization of payment services is driving vendors to offer more distinctive services.
- Everything You Need to Know from the CFPB’s Report on Credit Cards
- See all of our latest coverage of payments trends
Top Five Trends in 2024
Juniper highlights the following as the most significant over the next year:
The rise of A2A payments: A2A payments will grow rapidly in 2024. In Western markets, most digital wallets are offered by proxies, like Apple Pay and Google Pay. However, in many other parts of the world — such as India, Brazil, and China — digital wallets are driven by A2A. Juniper believes the rise of open banking, instant payments and merchant support will catalyze the A2A market in 2024, given these payments can be cheaper, faster and have lower risks of fraud.
More use cases for central bank digital currency: The Juniper report argues that 2023 was a pivotal year for central bank digital currencies, as a growing conversation among regulators aligned with some pilots and case deployments. 2024 will be a year of solid growth in the market with use cases in cross-border and B2B payments.
And once governments start adopting digital currencies, the pace of change will accelerate quickly. Juniper forecasts more than 213,000% growth in global CBDC transaction value between now and 2030.
Generative AI will transform spending insights: In the coming years, use cases for generative AI will crystallize into notable benefits for financial institutions internationally, due to the customer data availability and pressures from rising competition. The most important opportunity for banks and credit unions, as indicated by Juniper, will be in offering personalization and an easy-to-use experience tailored to consumer needs.
Digital wallets and digital identity: Between 2024 and 2026, digital identity apps are forecast to grow globally by 86%. In 2021, the European Commission published a proposal that included the concept of an EU ID Wallet (known as eIDAS2), which would allow users to store credentials and identity attributes.
While timelines are unclear, digital identities could grow exponentially in late 2023 or early 2024, kickstarting a significant wave of adoption in the EU. Juniper notes the move to digital wallet-based solutions is already underway, with Apple’s integration of digital driving licenses within its Wallet app.
AML tools to leverage AI: Global spending on regtech is forecast to grow 150% between 2023 and 2028. As many banks still struggle with complex regulatory requirements, new technologies, particularly AI, can make anti-money laundering (AML) and Combatting the Financing of Terrorism (CFT) compliance faster, cheaper and more effective.
These technologies can also simplify and enhance Customer Due Diligence (CDD) and Know-Your-Customer (KYC) processes, improving human performance and responding to threats more quickly. Juniper expects AML vendors to focus on developing more advanced AI-powered systems in 2024 to keep pace with the rate of change in payments.
While the following five trends may have less immediate impact in 2024, Juniper notes they still bear watching and planning for.
Sustainability and ESG compliance: Juniper anticipates more initiatives from technology vendors in 2024 to address ESG issues. This includes things like recycled plastics in cards, card recycling, solutions for the hearing and visually impaired and money management for the less affluent.
Value-added services for instant payments: In 2024, more banks will explore value-added services (VAS) that can be built on top of FedNow. Juniper notes the Fed has essentially created a toolbox for financial institutions to develop their own business models. One area of expected growth will be in A2A use cases, such as wallet top-ups, embedded finance, and B2B payments.
Mobile to banking tech services: In the coming year, the payments space will shift from P2P transactions to more advanced, banking-like services. As P2P reaches saturation in the mobile channel, mobile financial services (MFS) providers will seek new opportunities, leveraging the data they hold to offer more tailored services. Rather than directly compete with banks, Juniper believes MFS providers will seek partnerships with them.
Biometric in-store payments: The coming year will see increasing use of biometric solutions for payments.
One driver is the development of Amazon One, a contactless biometric payment system that will soon be rolled out to all Whole Foods stores and used for ID verification at MLB stadiums. In March 2023, JP Morgan also launched a pilot scheme to test palm and facial recognition-based payments at select retailers.
Biometric payments offer many benefits, including enhanced security and a fast and frictionless experience. Juniper notes Amazon’s scale could have a significant impact on the space by breaking past market lethargy and paving the way for a standardized system.
BNPL for B2B: To meet SMEs’ growing liquidity needs, Juniper expects BNPL players to start offering flexible credit options for small businesses. Increasing competition and saturation in the BNPL consumer space are leading to financial pressures and the risk of consolidation.
Amazon may already be paving the way in BNPL for the B2B segment. In early November, after the publication of the Juniper report, Amazon announced it partnered with Affirm to offer a buy now, pay later checkout option for small businesses.
Craig Guillot is a longtime contributor to The Financial Brand who specializes in technology. He often writes about IoT, cybersecurity and SaaS. His work has appeared in The Wall Street Journal, Entrepreneur and elsewhere.