What will the European payments industry look like in 2030?

A recent study by card issuing platform Marqeta has examined the potential roadblocks and innovations that may arise over the next decade in the payments industry.

Marqeta teamed with Consult Hyperion to compile the report – titled The European Payments Landscape in 2030: Implants, embedded ethics and a ‘post payments’ world – and conducted a series of 12 workshops with various members of industry. The workshops covered a range of issues including new and emerging payment methods and ethics and regulation. This was enriched with a consumer survey undertaken by 2,037 people, which sought to gauge public sentiment around advancing payment technologies.

What were some of the key findings of the report? One of the most relevant and noticeable trends was the belief that by 2030, ‘tribes’ and influencers will play a prominent role in driving the adoption of payment technologies. This trend is already being seen in the industry, with companies using social influencers to promote their brand.

There is also a growing acceptance around futuristic payment methods – with up to 51% of those surveyed claiming they would be willing to consider using a microchip implant to pay. Staying on the topic of technology, 31% of respondents aged between 18-24 said they would be comfortable with AI making automated decisions on their behalf to choose the most ‘ethical’ way of paying.

As payments systems continue to evolve, there is a belief they are becoming more invisible. The study found that by 2030, it is likely that there will be no cards or payment devices, with a person’s biometric data instead being captured by cameras, with the items they are purchasing sent directly their bank. While 32% of respondents see this kind of commerce as ‘creepy’, experts involved in the study said the convenience of the payment method will most likely win people over.

Losing control

The report also discovered that 35% of survey respondents are worried young people who don’t use cash – supported by the continuing disappearance of physical money – will struggle with learning how to budget and save physical cash.

As cash continues to disappear, there has been a growing debate around the effect that its removal will have on the role of financial education, as more technology begins to make decisions on the behalf of the consumer instead of the consumer making their own decisions.

The survey found that many UK consumers were wary of giving away control, with up to 34% of respondents stating they would be comfortable making payment decisions on the most affordable method to pay for goods and services, compared to 21% stating they would be comfortable with AI selecting the most ethical way to pay, while a further 21% said they would be comfortable with AI choosing which currency to pay in.

There are also groups who highlighted feelings of exclusion with the move away from cash payments. This was shown by 75% of survey respondents aged 65 and over who said they felt pressure to ditch cash due to places only taking card and contactless payments. In a more worrying find, 83% of consumers surveyed said the decline of cash will exclude those most at-risk in society.

In an interesting discovery, the study found that product design was noted as an area of potential discrimination for groups such as the elderly. Technical payments specialist Jonathan Williams remarked, “There are all sorts of technologies that have biases against people who are older. One example is that biometric fingerprint scanners don’t tend to work as well with people who are over the age of 70 because, in some cases, their skin tends to be drier and therefore has less ridge definition. So, they don’t get quite as good a read if they’re trying to use fingerprints.”

Could this make it easier for digital currencies to be fast tracked to being more inclusive for all? The study discovered that education may be needed to boost uptake, with 30% of survey respondents saying they didn’t like the idea of the state tracking their digital currency while 27% didn’t understand how central bank digital currencies would impact them. It was also found that 91% of respondents express concerns about AI-bias creeping into financial services.

Marqeta SVP managing director for Europe Ian Johnson said, “If the past two years have taught us anything, it’s that no one can predict the future. In less than a decade’s time, the payments landscape could look very different. It could be the norm to pay by waving a hand. What’s clear is that in 2030 and beyond, digital payments will have an increasingly foundational role in our lives – tying into our ethics, our future education, and the smooth functioning of our economies.

“While the future is a mystery, one thing is for certain: the most ambitious and innovative payment methods will be those that are underpinned by agility and the ability to make automatic, real-time decisions. A flexible payment ecosystem will also be key for making all this happen, creating room for more offerings to enter the space and, in turn, supporting greater inclusion and sustainable alternatives. All that remains to be said is, watch this space.”

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