Instant payments and fraud prevention have quickly become the areas fintechs need to focus on most, according to the third portion of the ‘2024 Payment State of the Union’ study by Discover Global Network, the global payment network.
Conducted in partnership with 451 Research of S&P Global Market Intelligence, Discover Global Network surveyed thousands of decision-makers across fintechs, merchants, and consumers to better understand if ecosystem priorities are aligned.
It found that instant payment adoption is increasing, with 73 per cent of consumers using the payment method in the last 90 days. Consumers revealed interest in using instant payments for:
Real-time bill payments (82 per cent)
Real-time business payouts (80 per cent)
Real-time account transfers (76 per cent)
When deciding to use an emerging payment experience, 51 per cent of consumers see the security of their personal information as the most important factor; followed by ease of use (33 per cent) and convenience (30 per cent).
While many believe that added friction would put customers off, the majority (71 per cent) of consumers said they are willing to adapt to additional security steps when logging in or at checkout.
“The third instalment of this year’s survey revealed significant opportunities for fintechs to address the needs of both consumer and merchant audiences,” said Jordan McKee, research director at 451 Research. “Contrary to expectations, their priorities aligned more closely than anticipated, unveiling a clear path to current and future growth. Overall, the findings emphasise that instant payments and fraud prevention are key areas where fintechs should concentrate their efforts to drive success.”
Fintechs and merchants
Merchants view accepting payments as a highly strategic focus for competitive differentiation (61 per cent) – seeing payments as critical to the success of the customer experience (58 per cent), business performance (58 per cent), and customer loyalty (57 per cent).
Merchants also want to improve fraud prevention processes (75 per cent) and provide a wide variety of payment options for consumers (75 per cent) to ensure business success. Thirty-eight per cent of merchants identified reducing fraud/chargebacks as a top business payment priority in the next two years.
Ninety-three per cent of fintechs say instant payments are an important emerging payment use case for their business. Business-to-business payments (66 per cent), business-to-consumer payments (57 per cent), and consumer-to-business (55 per cent) are the instant payments use cases fintechs are most interested in pursuing.
Fintechs are also most interested in keeping their expertise in artificial intelligence (AI) (44 per cent) and half (50 per cent) of fintechs want to leverage AI to pursue fraud prevention.
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