Five payments trends to watch in 2023
With the speed of innovation in payments being what it is, an annual take on what’s in store for the industry just doesn’t quite cut it anymore. On the heels of Visa Payments Forum, our annual gathering of experts and thought leaders to share insights and perspectives on new opportunities emerging in the industry, here are five mid-year trends to keep an eye on through the end of 2023 and beyond.
1. Summer travel could be big — especially where it’s easiest
Global travel has steadily increased through 2023, setting this year’s summer travel season up for further gains. From January through April 2023, outbound travel from 63 out of the 113 countries under the Visa International Travel Platform exceeded their 2019 levels.¹ 95 other countries reached a 75 percent recovery rate or better, putting most countries near or past 2019 levels.²
Demand for international travel should continue to be strong through travel season — Northern Hemisphere’s summer months of June through August. Some areas, such as Asia Pacific, have re-opened. But where travelers decide to actually go may hinge on ease of access, as some evidence indicates travelers may be choosing destinations with more open entry requirements. For instance, the difference between travelers choosing Cancun vs Las Vegas between 2019 and 2022 — cities with similar recovery rates compared to 2019 — was about 100,000 visitors, likely attributed to Mexico not requiring visas for visitors from a number of countries in LAC.³
2. Sustainability still front of mind — for consumers, investors and regulators, and employees
Sustainability concerns continue to take center stage, influencing behaviors and consumption patterns, investment decisions, and company priorities.
For instance, among consumers, 66 percent⁴ believe CEOs should act rather than wait for governments to put sustainability first, while 43 percent of customers⁵ say they would no longer buy from companies that act in a way that was environmentally irresponsible.
Sustainability can have funding and regulatory implications, too. One study found 78 percent of institutional investors to be evaluating potential investments through the lens of ESG — a number that has more than doubled since 2018.⁶ And with 46 percent of boards seeing regulations as becoming a critical business risk, initiatives that focus on sustainability are becoming proactive ways to mitigate that risk.⁷
Employees, too, care more and more about sustainability, with more than half (62 percent) saying that they believe they have the power to force change within their organizations.⁸ And a full 50 percent of employees are more likely to make their objections heard by management or engage in workplace protests.⁹
3. Cross-border remittances go digital first
The wave of digital transformation continues in cross-border money movement, making the experience easier, faster, and more affordable for both consumers and businesses. Whether a family member is sending money home or a gig worker is able to quickly receive their day’s earnings, the impact of these kinds of transactions is significant on the lives of those involved.
In cross-border remittances, where some 800 million people receive remittances yearly¹⁰ from around $800B in global flows, the potential impact is enormous.¹¹
Some of the existing space is occupied by traditional players, with a strong in-person agent network. Up to now, much of the middle of these flows has been automated, but manual at the last mile. Even so, a groundswell of fintechs and traditional banks are working to change that. While some have global plans and others are more region-specific, all are focused on bringing the digital-first experience to cross-border remittances. We continue to see great advances and innovations by a number of digital first players.
4. In crypto, asset tokenization is big business
For much of the year, crypto headlines have revolved around market volatility. But perhaps the more interesting story is in asset tokenization.
At Visa, we have largely used the language of tokenization to refer to payment credentials — the creation of a kind of stand-in token that works within a given ecosystem, but is ultimately useless to a hacker. In crypto, though, tokenization refers to the representation of any asset —from fiat currencies and government bonds, to stock certificates and securities, to real estate deeds or car titles—on a blockchain.
Each tokenized asset has a unique, digital identifier, enabling real time tracking and monitoring. If adopted on a large scale, tokenization itself could lead to expanded forms of commerce. From increased transparency, 24/7 automated risk management through smart contracts, dynamic portfolios and untold efficiency gains, banks and the wider ecosystem stand to gain much from this development. And with research from the Boston Consulting Group suggesting that tokenizing global illiquid assets could become a $16 trillion industry by 2030,¹² this is one trend certainly worth keeping a close eye on.
5. Fraudsters gain a superpower: Generative AI
Maybe you’ve heard the one about the journalist who used an AI clone of his own voice to gain access to his bank account?¹³ Or the one about GPT4 hiring a freelancer to get through a CAPTCHA?¹⁴ Generative AI tools aren’t just for hunting down recipes or mocking up speech outlines—increasingly, we expect, they will be tools used to commit fraud.
Historically, social engineering attacks have had a few red flags that the average user would notice. Strange greetings, misspelled names, poor grammar, confusing and high-priority requests are all common hallmarks of a phishing email. But new advances in artificial intelligence are removing these glaring key indicators, making it increasingly difficult for users — even technical professionals — to differentiate between a legitimate email and a phishing one. We anticipate savvy, malicious actors to put this emerging tech to use for their own ends.
Having pioneered the use of AI models in payments years ago, we continue to use it as a force for good, leveraging more than 60 different AI capabilities to enable faster consumer payments through banks, improve payment experiences during bank outages, and perhaps most importantly combat fraud.
Want more emerging payments trends? Check out Global Travel Insights from Visa Business and Economic Insights.