As Australian commerce undergoes a significant transformation, driven by evolving business models, emerging technologies, and shifting consumer preferences, the payments landscape is at the forefront of this change. Businesses are increasingly moving away from outdated systems to embrace platforms that offer faster, safer, and more convenient payment solutions. In 2024, as organizations refine their growth strategies, a strong emphasis on innovation, security, and customer experience will be essential for success. Here’s a closer look at the key payment and financial technology trends set to shape the Australian business environment this year.
1. The Rise of Embedded Payments
The emergence of platform business models, including marketplaces and Software-as-a-Service (SaaS), has revolutionized the business landscape, particularly for companies catering to small and midsize businesses (SMBs). To meet the growing demand for streamlined processes, many platforms are integrating payment solutions directly into their services. This integration not only unlocks hidden value through new revenue streams but also enhances customer loyalty.
Research conducted in collaboration with Boston Consulting Group indicates that 59% of SMBs in Australia are interested in embedded financial services within a platform. Additionally, 90% of SMBs seeking funding solutions would benefit from having their business loans pre-approved. By providing a one-stop solution, businesses can simplify their operations, scale for growth, and deliver exceptional customer experiences.
As local companies embrace embedded payments, they are opening the door to increased operational efficiency, reduced costs, and a more seamless payment experience for customers. This strategic move allows platforms to remain competitive and deliver unparalleled value while enabling businesses to charge fees for processing transactions and providing financing options.
2. Mobile In-Person Payment Devices
The rise of portable in-person payment devices is reshaping the in-store transaction experience, allowing businesses to adapt to changing consumer behaviors and expectations. A shift in perceptions around ideal shopping experiences—accelerated by the pandemic—has made mobile payment devices essential for enhancing operational efficiency and flexibility.
Research indicates that 62% of Australian shoppers are willing to leave a store if they cannot check out using their preferred payment method. Mobile payment devices enable businesses to provide a variety of services—such as refunds, endless aisle capabilities, and appointment bookings—directly within the store, improving the overall shopping experience. Over one-third of Australian shoppers report that mobile technology has made their in-store shopping experience faster and more enjoyable.
The adoption of portable payment terminals is leading to a rethinking of traditional store layouts. With the ability to facilitate seamless transactions anywhere in the store, businesses can create dynamic and interactive environments that prioritize engaging, customer-centric experiences over static payment points. The integration of digital and physical retail is becoming increasingly common as brands leverage mobile payment solutions to elevate the customer experience.
3. Leveraging Payments Data for Loyalty
A notable trend emerging in 2024 is the strategic use of payments data to drive customer loyalty. Businesses are increasingly recognizing the importance of harnessing their own data to create personalized experiences rather than relying solely on external sources. As Australian consumers become more price-conscious amid ongoing inflation, they expect to be rewarded for brand loyalty through personalized offers and experiences.
Data shows that 36% of consumers in the Asia-Pacific region opted to wait for major sales events, such as Black Friday or holiday sales, to make big-ticket purchases. Additionally, 59% of Australian businesses report an increase in customer expectations due to the cost-of-living crisis. However, only 22% of Australian businesses currently have loyalty programs that integrate both online and offline transactions.
This presents a significant opportunity for businesses to enhance customer engagement and foster loyalty by linking in-store and online transactions to individual customer profiles. By leveraging first-party payments data, businesses can implement more targeted marketing campaigns and personalized promotions that resonate with their audience, ultimately driving revenue growth.
4. Tokenisation: Boosting Security and Operational Efficiency
Tokenisation is becoming increasingly important in the Australian payment landscape, particularly in 2024. This technology securely replaces sensitive customer card information with non-sensitive data, streamlining subsequent purchases and enhancing security. With the growing adoption of tokenisation, businesses can benefit from cost-effective and secure payment routing, uninterrupted billing for customers, and reduced administrative burdens.
The recent surge in fraud incidents affecting Australian retailers has heightened the focus on security and fraud prevention. As a result, businesses are increasingly adopting tokenisation to improve their payment processes. Notably, recent data shows a rapid increase in the number of network tokens in circulation, surpassing the number of physical cards.
The shift towards card-not-present (CNP) payment methods is expected to gain momentum this year, as issuers support the adoption of secure tokenisation options. As businesses embrace these developments, they will enhance their security measures while also improving operational efficiency.
Refining Your Payments Strategy for Growth
The integration of technology and strategic insights is set to propel Australian businesses into a new era of commerce, where seamless payment experiences become a cornerstone of success. As organizations prepare to navigate the complexities of 2024, it is essential to ensure that their payment strategies align with key trends and long-term growth objectives.
To thrive in this evolving landscape, businesses should look for opportunities to optimize their payment setups, enhance operational efficiency, and create immersive shopping experiences that foster customer loyalty. Selecting a robust payments provider capable of supporting these initiatives is crucial for ongoing success. By focusing on these key payment trends, Australian businesses can position themselves to capitalize on the latest opportunities and drive growth in the years to come.
