What’s Santa bringing down the chimney this holiday season? Lots of presents that were bought with alternative payment methods. An early holiday forecast predicts that purchases made through buy now, pay later (BNPL) services and digital wallets will more than triple this year.
These insights come from ACI Worldwide’s annual study, Unwrap Holiday Checkout Trends 2024, which also found that digital wallet transaction volumes are expected to surge by 209%, a figure that is sure to capture attention.
With the rise of contactless tap-and-go payments and increased QR code acceptance at physical sales points, digital wallets have become a favorite among shoppers. Separate data from the Paze Pulse report echoes these findings, with research showing that 91% of consumers frequently use digital payments at checkout. Online shoppers, in particular, noted using an array of digital payment tools for their purchases.
The ACI report highlights even stronger growth for BNPL services, forecasting a 237% increase in global transaction volumes.
Meanwhile, real-time account-to-account payments are also expanding, though at a more modest pace. ACI notes that more merchants around the world are adopting real-time payments for in-store transactions, especially in India, Southeast Asia, and Brazil. And the rollout of Wero in Europe could further accelerate A2A payments in the region.
Fraud Grows at a Slower Pace
When it comes to emerging payment methods, the other side of the coin is an increase in fraud. While ACI expects moderate growth in some fraud types, several appear to be cooling off. Their prediction is that card fraud will rise by just 1.1% this year. “One key trend is that fraudsters are using skimmed/phished international card details to set up mandates as foreign transactions that do not require a second level authentication method—just the credit card number, expiry date, and CVV,” the report cautions.
However, synthetic identity fraud is becoming a growing threat, with ACI forecasting a 26% increase this year. Unlike traditional identity theft, synthetic ID fraud involves criminals creating new identities using real personal information, such as social security numbers or birth dates.
Even though synthetic fraud uses real data, it can still impact an individual’s credit score and cost businesses millions. ACI’s figures indicate that the average value of a synthetic identity fraud attack is nine times higher than other common types of payment fraud.
Source
Arwen Volkov, A graduate of the University of St. Gallen in Switzerland with a degree in International Finance, Arwen specializes in sustainable finance and green investments. She began her career at an investment bank in London, where she developed financing models for environmentally friendly projects. Known for her analytical and strategic thinking skills, Arwen is a sought-after financial consultant. In her spare time, she mentors fintech startups, contributing to their growth strategies. She is also a nature enthusiast and an amateur photographer.
