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Marqeta 2023 State of Payments Report: Rise of P2P Payment and Embedded Financial Services, & Hybrid Future?

Tearsheet | Sara Khairi | Jul 5, 2023

Marqueta 2023 state of payments - Marqeta 2023 State of Payments Report:  Rise of P2P Payment and Embedded Financial Services, & Hybrid Future?

Image: Marqueta - 2023 State of Payments Report

The future of banking is expected to be a hybrid model, combining traditional and embedded financial services (Marqeta:  2023 state of payments report)

  • Traditional vs Digital Banks -- Hybrid future? 
    • Despite the rise of digital banking, traditional banks continue to play a significant role. Consumers are seeking the best of both worlds, with 37% wanting to maintain relationships with their traditional banks while also enjoying the benefits of tech-enabled services from digital banks.
    • 81% of consumers using a traditional bank for their primary account and 64% storing the majority of their funds in a traditional bank.
    • However, 37% of consumers also use a digital-only bank, primarily due to satisfaction with their mobile apps.
    • Traditional payment methods, such as cash and debit cards, still surpass newer digital payment methods, but the gap is narrowing.

See:  Payments Canada Report: Rebound & Grow – Payment Methods and Trends in 2021

  • Rise of Embedded Financial Services:
    • Embedded financial services, such as integrated payments and Buy Now, Pay Later (BNPL) options, are gaining popularity due to their convenience. These services are expanding beyond payments and lending to include insurance and investments.
    • Integrated payments, in particular, are leading the way, with 76% of consumers preferring to make purchases through a retailer's mobile app, up from 69% in 2022.
  • P2P Apps Gaining Traction - expected to reach $4.89 trillion by 2030
    • Younger Americans are driving this growth, with 75% of consumers having used a P2P payment app in the last 12 months.
    • PayPal is the most popular service, with 88% of consumers reporting usage in the past twelve months.

Read:  Payments Canada Delays Launch of Real-Time Rails Again (without a timeline)

  • Shift in Card Business:
    • The increased adoption of digital wallets is creating competition among card issuers. Consumers tend to keep only a few cards in their digital wallets for ease of use and convenience. Card providers can stay ahead by offering a hassle-free experience, flexible payment terms, and relevant rewards and incentives.

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NCFA Jan 2018 resize - Marqeta 2023 State of Payments Report:  Rise of P2P Payment and Embedded Financial Services, & Hybrid Future?The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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