Trends 2023: Secure Digital Payments for Struggling Consumers
Individuals will continue to take advantage of the convenience of digital payments. And organizations must explore ways to help make the payments process more user-friendly, with an eye on helping struggling customers better manage their debt. But how will the current economic issues and regulatory mandates affect these digital payments and the payments industry in 2023? Let’s take a closer look.
Dealing with debt
The state of the economy has the greatest impact on the payments market, and the current economic situation is no exception. One look at the news shows numerous stories of how individuals and families are struggling to pay their bills.
One report revealed that 56 percent of Americans don’t have enough money in savings to cover a $1,000 emergency expense. Another showed that 41 percent of adults have medical debt. Much of this is due to increasing inflation rates, which continue to make it difficult for families to meet their financial obligations.
As these economic issues continue, organizations will be tasked with implementing solutions that allow multiple payment options and allow users to make payments based on their schedule.
Make it secure
Our digital world continues to be under attack by cyberthieves and hackers. And the payments industry is a prime target for these nefarious individuals. As such, the payments industry will see increased requirements around security. NACHA, the organization that governs the ACH Network, is requiring that originators of ACH WEB debits must validate the consumer’s account information upon its first use.
And the Payment Card Industry Data Security Standard (PCI DSS) recently updated its standards PCI DSS 4.0, with new rules around multifactor authentication (MFA). PCI DSS 4.0 now mandates that MFA must be used for all accounts that have access to the cardholder data, not just administrators accessing the cardholder data environment (CDE).
As organizations look at payment solutions, they must keep these regulatory requirements in mind.
Looking to technology
Many organizations are exploring ways to improve the customer experience, including those in the payments industry. That’s because the rise of digital payments is expected to continue. According to one report, 65 percent of all transactions are expected to be digital by 2026.
Companies are looking to take advantage of technology by moving to all-in-one solutions that incorporate payment processing. They understand that as customers’ financial struggles continue, payment solutions must continue to advance and make the payments process more convenient.
Organizations will also look to technology to help with staffing issues. The work-from-home and hybrid working environments have changed the way companies hire and train their employees and have altered the way employees do their jobs. As such, organizations need streamlined training and workflow processes designed for employees who are no longer located in the office. These processes will help make employees more efficient, improving overall productivity and performance.
Digital solutions for debt
Of course, consumer behavior will also play a key role in the payments industry in 2023. But, if current trends continue, it’s going to be a tough year as consumers continue to struggle to pay their bills.
Medical bills continue to cause the most problems for consumers. Approximately 50 million adults (about 1 in 5) are paying off medical bills through an installment plan, while others choose to borrow money. According to a 2022 report, 10 percent of Americans who have paid off their medical debt did so by taking out a bank loan.
Today’s digital world is also playing a role in helping consumers with their debt. An estimated 8 million Americans have started crowdfunding campaigns through websites, such as GoFundMe, to pay for medical expenses for themselves or someone in their households.
Organizations must explore all options to help struggling consumers. This means providing consumers with more electronic payment options, as well as the flexibility of payment plans and recurring payments.
The future is digital
Digital payments are becoming more commonplace and will become even more so in 2023. This means organizations must adapt and provide payment solutions that embrace the needs of these digital citizens. This also means understanding and adapting to consumer financial struggles. Until the economy rebounds, individuals will continue to struggle with debt and making their payments. And organizations will look to implement innovative solutions that help people better manage these payments.
This is the final article in a series that explored trends in the healthcare, ARM, government, and payments industries.
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