Accelerating Mass Adoption: Strategies for the Future of Finance

The pandemic has acted as a catalyst in the widespread adoption of digital payments, propelling contactless payments to the forefront of this transformation. According to a recent report from Juniper Research, the total number of unique contactless mobile payment users will reach 1 billion globally by 2024, rising from 782 million in 2022, representing a growth of 60%. 

Yet the factors that have fuelled the rise of contactless payments are also needed for the mass adoption of Open Banking, another key player in the future of finance. The global number of Open Banking users is predicted to increase at an average annual rate of almost 50% from 2020 to 2024, and the global value of open banking payments will surpass $116 billion by 2026, a significant increase from $4 billion in 2021.

The first growth factor for contactless has been significant investments in contactless acceptance infrastructure, particularly in emerging regions like Asia Pacific. An estimated 200 million new contactless payment users will emerge by 2024 as a result. In the same way, open banking adoption depends on infrastructural investments, especially in secure and user-friendly API technology that facilitates seamless financial transactions. 

The second is convenience and ease of use. Both payment methods are designed to offer a seamless, user-friendly experience, reducing friction and making transactions as effortless as possible for consumers. Soft POS, which allows smartphones to accept NFC payments, is poised to rapidly expand contactless acceptance infrastructure. Compared to traditional contactless POS, its lower cost eliminates the need for additional hardware, making it a cost-effective solution. 

Next is regulatory support. Policymakers and regulators ideally strike the right balance between encouraging innovation and ensuring consumer protection. They provide a supportive environment by establishing clear guidelines, promoting standardisation, and fostering collaboration between financial institutions, fintech companies, and other stakeholders. 

Lastly, there is interoperability. Ensuring compatibility and seamless integration between different payment systems, devices, and platforms will make it easier for consumers to adopt and use both Open Banking and contactless payment methods. This harmonisation of financial services promotes greater transparency, empowering consumers to make informed choices and access a broader range of tailored financial products and services. 

Investing in infrastructure, focusing on convenience, regulatory cooperation, and ensuring interoperability is crucial to achieving mass adoption of contactless payments and open banking payments. Collaboration and innovation within the payments industry are essential to make this a reality.

Ultimately, the growth of contactless and open banking payments indicates that consumers are looking for fast, convenient, and secure payment options. The payments industry must continue investing in the factors that will lead to the proliferation of innovative payment options that cater to these evolving customer needs. It is clear that the future of finance is digital – and that mass adoption of contactless payments and Open Banking may arrive sooner than anticipated.