Navigating 2024: Payments Industry Trends and Challenges

In 2024, the payments industry will witness battles over card interchange fees, real-time payment adoption, fraud prevention, and acquisition activities, writes Payments Dive.

The ongoing card interchange fee conflicts will intensify this year, as retailers and consumer advocates push for limitations while card issuers resist, particularly with the proposed Credit Card Competition Act aiming to introduce more competition.

Real-time payments, fueled by the Federal Reserve's FedNow launch, will be a prominent theme, with questions about adoption rates and use case development by financial institutions. The business-to-business (B2B) payments sector is expected to accelerate its digital transformation, driven in part by FedNow, as real-time payments simplify transactions and streamline reconciliation.

Consolidation within the payments industry is anticipated, especially in areas like embedded finance and buy now, pay later, with strategic acquirers and private equity firms eyeing opportunities. Tech giants Apple and Google will face challenges in their digital wallet endeavors, with new entrants like Paze and potential competition from Twitter's payment feature (X). The industry will see more digital wallet expansions and efforts to simplify financial management.

Regulators will focus on the surge in payments fraud, driven by the growth in digital transactions, with concerns about fraud risks accompanying the adoption of real-time payments. Lawmakers are also scrutinizing companies like PayPal and Block regarding reimbursement for customers affected by fraud on their payment apps.