Three massive changes coming to consumer payments and banking

Recent years have seen huge advancements in the customer payment and financial management space .

In 2022, 44 percent of customers claimed to have changed their payment methods, the majority switching to those that track spending more accurately, and digital wallet usage has increased by 41 percent. There has also been an increased focus on financial safety and security, with 44 percent of customers claiming that security is the primary consideration when choosing how to pay online.

In response, financial institutions are changing. Here are three recent updates from consumer payment giants that signal what is to come in this important space.

Mastercard brings crypto trading capabilities to banks

According to the 2022 Mastercard New Payments Index, 29 percent of 35,000 customers currently hold some investment in cryptocurrency but 65 would prefer crypto-related services to be provided by their current financial institution.

In mid-October 2022, Mastercard launched its solution, Crypto Source, to meet this rising demand. The program allows banks and fintechs to ensure safety and security for their customers as they delve into cryptocurrency investment.

It follows Mastercard’s acquisitions of Finicity, Ekata, RiskRecon and CipherTrace, which brought new technological capabilities to the payments giant.

Ajay Bhalla, president of cyber and intelligence at Mastercard, said: “At Mastercard, trust is our business. [Crypto Source] is a connected approach to services that will help bring users safely and securely into the crypto ecosystem.”

Crypto Source allows customers to invest in crypto with their current financial institution, bringing innovation to traditional banking and a so-far unmatched sense of security to cryptocurrencies.

Visa Direct extends to reach to 1.5 billion digital wallets

Digital wallets are gaining traction across the world as many customers forgo the services of traditional banks. Bringing banking services to the underserved, Juniper Research says there are 3.4 billion digital wallets in use at present and that this will increase by 53 percent to 2026.
Now, Visa Direct is adding cross-border send-to-wallet capability to 78 digital wallet providers, enabled by its partnership with B2B payment platform, Thunes.

It will see financial institutions, governments, neobanks and money transfer operators able to utilize the new functionality to enable their consumers and small business customers to send funds to markets across Africa, Asia, and Latin America where wallets may be the go-to payment method.

Ruben Salazar Genovez, global head of Visa Direct, said: “From an agricultural worker in Bangladesh to a young professional in London who is looking to send money to family overseas, Visa strives to create more ways for individuals and SMBs to participate in the global economy. We are thrilled to collaborate with Thunes and help enable quick and simple access to the financial system to more customers around the world who may use digital wallets as their primary financial instrument.”

It means personal and business customers have far more choice in how and where they move their money.

PayPal steps into rewards with united loyalty platform

PayPal’s new rewards program gives customers an easy way to shop, earn, track, save and redeem rewards and offers all in one place.

PayPal Rewards connects PayPal's merchant offers, cash back savings and shopping products into a single experience that allows consumers to earn PayPal Rewards points and save money through cash back and discounts at participating retailers.

Greg Lisiewski, vice-president of shopping and global Pay Later at PayPal, said: "With the financial challenges people face these days, brought on by rising prices and the need to tighten budgets, it can be frustrating to shop for everyday essentials or plan for the holidays. PayPal Rewards makes it easy to find sales, discounts, and great deals when making a purchase with PayPal, through cash back, discount codes, or other rewards."

As many as 25 percent of consumers say loyalty programs are the most important factor when deciding where to shop. Now, more than 20 years after PayPal launched, PayPal Rewards is on track to help its users capitalize on the hundreds of loyalty programs that exist.