Unveiling the payment stories of 2024: a year-end recap

We explore the headlines that shaped the payments industry in 2024 and what they mean for the future.

2024 saw the further decline of cash and rise of embedded and mobile payments, powered by account-to-account (A2A) and pay by bank-style Open Banking payments. So much so, borders are no longer barriers to global trade.

We look back on the main payment trends of 2024 and offer insights into how businesses can capitalize on them.

Less-cash vs cashless vs cash-only

More and more people are living largely cashless lives. In the UK, for example, the share of cash payments has fallen from 51 percent in 2013 to 12 percent in 2023. Nearly 4-in-10 adults used almost no cash in 2023, says UK Finance.

However, at the same time, cash is still the second most frequently used payment method in the UK behind debit cards. Those using mainly cash rose slightly to 2.6 percent of the population.

What’s more the Bank of England says that the value and volume of bank notes in circulation has increased sharply since 2020. Partly driven by the pandemic and cost of loving crisis, more people are using cash as a store of value, for emergencies and to feel more in control of their money.

Key takeaway

People’s schizophrenic relationship with cash continues. The decline of cash is a steady and seemingly irreversible trend in the UK, as it is in other countries. Yet while people may not be using cash, they still like to hold it. Accepting a broad range of payment methods shows that you’re open for business. Plus understand that there are valid reasons behind how customers choose to pay.

Embedded payments transform business

Integrating payments directly into software applications is the ultimate friction-free experience. To take up the offer, customers merely need to agree. No wonder embedded payment transaction value is set to surpass $2.5 trillion globally by 2028.

Also known as embedded payments, offering loans at the point of purchase or home insurance alongside a new rental agreement, represents a huge opportunity for financial services and non-financial providers alike.

Open Banking is the technical and regulatory rails powering embedded payments. Pay by bank Open Banking-style promises more joined-up money, through the sharing of data with customer consent.

Key takeaway

Connecting customers to a funding source – whether that’s a bank, mobile money or loyalty points account – is the future not only of payments but also of business. If businesses can connect customers to their money, there’s scope for them to innovate and collaborate more.

Mobile-first financial services

Mobile payments. Digital wallets. Super apps. Mobile technology is transforming traditional banking and payments. People now have a digital remote control to their everyday and financial lives.

Mobile payments with digital wallets such as Apple Pay, PayPal and local wallets are predicted to be the fastest growing payment method globally. The CAGR of such digital wallet transactions in e-commerce is estimated to be 15 percent between 2023 and 2027.

In developed markets, this is ushering in a new era of speed and convenience. In developing and emerging markets, mobile wallets are increasingly playing the role of a bank account, driving a new era of digital inclusion.

Key takeaway

Mobile wallets will continue to evolve into comprehensive platforms, integrating payments, identity, loyalty and even health care, according to Mastercard. As such, the leaders will be those who create intuitive, interoperable ecosystems to add value to users.