Take On Payments, a blog sponsored by the Retail Payments Risk Forum of the Federal Reserve Bank of Atlanta, is intended to foster dialogue on emerging risks in retail payment systems and enhance collaborative efforts to improve risk detection and mitigation. We encourage your active participation in Take on Payments and look forward to collaborating with you.
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What We'll Be Watching in 2022
At our end-of-the-year Talk About Payments webinar in December, we noted that the global pandemic has touched every aspect of our personal and professional lives. The tragic loss of life, risk of illness, surge in remote work, restrictions on or shutdowns in business operations, and supply chain disruptions: these are the factors that affected the behavior of consumers and businesses.
As we enter 2022, none of us knows what lies ahead for consumer payments behavior. After all, as one Nobel prize-winner said, "We are prone to overestimate how much we understand about the world and to underestimate the role of chance in events."
For that reason, we are not making any predictions when it comes to payments. Instead, each of us in the Retail Payments Risk Forum will be closely watching the trends and issues in 2022. Throughout the year, we will blog on these items based on research from the Federal Reserve or external sources.
- Nancy Donahue: As the United States continues to expand and improve broadband infrastructure, I am interested in the long-awaited 5G rollout currently scheduled to begin January 19. As we start the year with a return to virtual learning in some school districts and continued remote work for many people in the labor force, access to high-speed broadband internet remains on the forefront as an important component of financial and economic inclusion.
- Claire Greene: Flashing my phone or tapping my watch is fun, but I'm enamored of the information content that flows along with newer ways to pay. So for 2022, I'm excited about QR codes. Increasingly since March 2020, QR codes have shown their value as a physically distanced information delivery system. I can access menus, maps for museums and walking trails, theater programs, even my vaccination card. My question for next year is: In the United States., will QR codes become a popular way to pay?
- Scarlett Heinbuch: Cash—its preservation, usage, and merchant acceptance—remains an interest area to watch in 2022, along with the rise of digital currency. I am interested to see how these payments streams converge and coexist in the coming years.
- Mary Kepler: Although contactless payments have been around for quite some time, the concept didn't seem to catch on in the United States until the pandemic provided a reason to avoid touching things. I'll be watching for the tap-to-pay trend, and other contactless applications, to continue to grow.
- Doug King: The evolution of buy now, pay later (BNPL) as well as the emergence and growth of account-to account payments in retail.
- Dave Lott: Since its peak in the second quarter of 2020 at 16.1 percent, ecommerce sales as a percentage of overall retail sales has remained strong. Still, it has declined to 120 basis points over its prepandemic level of 11.8 percent. What levels will in-person shopping reach as we start another year still in the throes of the pandemic? Related to that payment behavior, how will third-party delivery services be affected?
- Catherine Thaliath: With the acceleration of digitization efforts in business-to-business payments, I am curious to see what the future holds for accounts payable/accounts receivable automation, paper checks, virtual cards, etc.
- Jessica Washington: Risk and fraud mitigation techniques and tools are what I’m watching. We have been seeing rapid growth and adoption of innovative payment services. The payments industry, including banks, fintech and regulators, will need to keep pace and work together on how we fight fraud and mitigate risks.
So, what are your "must watch" payments issues and trends for 2022? Let us hear from you.
Happy new year from the Risk Forum team!