A2A, micropayments, and other ways you can add value for customers in 2024

Since the pandemic, payments have a focus for merchants, consumers, and ecosystem players alike, causing a hyperfocus on the payment itself to make it cheaper, more accessible, and more embeddable. However, while the payment is important, what’s critical now more than ever is what value payment gateway providers can add to the overall experience for consumers. Firms are catching on to this trend as they seek to diversify the value-added services they offer to consumers by creating greater value and utility around the payment experience. In 2024, it’s not what you do, but how you do it.

• 2024 will be the breakout year for account-to-account (A2A) payments
• Micropayments will break out of their niche and become an alternative to subscriptions
• Non-payment use cases will dominate the headlines for digital wallets
• More than half of B2B business will flow through B2B payment networks²

2024 will be big for payments, says Forrester, but it will be especially big for those seeking to create a unique offering that capitalizes on the value-add that their business can bring to consumers. In Europe alone, payment adoption is expected to more than double due to PSD2 payment innovation, and in the U.S. hundreds more banks and PSPs will launch A2A faster payment capabilities since FedNow officially launched in mid-2023. Merchants are becoming increasingly more sensitive around card fees and banks delivering payment solutions to complement open banking, as well as the need to stay ahead of unavoidable mandates requiring faster payments. APAC will also be pursuing scale through interoperability and real-time cross border A2A payments, with many platforms seeking to mirror Brazil’s Pix A2A solution.

In 2024, Forrester expects that a global content provider will officially introduce micropayments to counterbalance the increasing terminations of inflexible subscription plans. Customers will continue to close subscriptions en masse, but providers offering micropayments as a “pay (only) when and what you use” options could avoid this trend by enabling on-demand micro-consumption. Additionally, with merchants pursuing lower processing costs, A2A payments are cheaper than card and will be very attractive for those seeking add revenue at the same time. Forrester estimates that one in 10 merchants will dabble with pay-as-you-go micropayment strategies, particularly in regions where A2A is already mature (e.g., Europe, UK, Brazil).

Forrester predicts that digital wallets will still be on the frontlines in 2024 but for distinct reasons. Whereas mobile payments catapulted digital wallets during the pandemic, 2024 will see a rise in non-payment use cases (upwards of 75% of digital wallet announcements) such as identity, ticketing, and passport and license storage, along with retail. APAC will see more than half of its transactions occur within digital wallets, and wallet usage is expected to increase by 20% in Europe and North America. Countries such as the Netherlands, Norway, South Africa, Thailand, and Vietnam will see more than half of its users fund their wallets directly from bank accounts as open banking continues to gain more traction. Banks, retailers, healthcare providers, corporates, airlines, and governments will need to reimagine their wallet strategies now to keep up with the surge in wallet usage to bypass cards, especially as digital rewards and gifting continues to explode.

Lastly, Forrester mentions how consumer payment networks have been around for decades, but new business models, customer demands, and tech innovations will drive B2B payment networks to grow exponentially. B2B eCommerce will surpass $2.2 trillion in the U.S. alone in 2024, emphasizing an increased need not only for seamless digital payment experiences but advanced data and network intelligence that improves operational efficiency. Advanced AI and predictive analytics will be essential in developing sophisticated B2B network intelligence and with streamlining onboarding. In an age where digital relevancy is key for success within the payments landscape, merchants must pivot their B2B strategies to keep up with this momentum.

2024 will be a year for growth and opportunity within payments, and merchants will need strong value-added services to keep up with competition. At Cybersource, we know payments. Our global reach, modern capabilities, and commerce insights provide us with flexible, creative commerce solutions or everyday life—experiences that your customer will see as valuable and help grow your business at the same time. To learn more about our value-added services can help you keep up with these emerging trends, contact us.³