Man sitting at his computer learns about payments trends

The small business owner’s guide to 2023 payments trends

Tuesday, February 28, 2023

Ready or not, 2023 is here. And so is the future of commerce.

Spiking inflation, climbing interest rates, supply chain issues, the volatility of cryptocurrency, digital payments developments, new online shopping methods … Throw a rock these days and you’ll hit a disruption.

From technological to economic, there are a lot of factors in flux impacting the future of consumer spending. And as a small business owner, you have a front row seat.

But keeping up with the latest trends while running a business is tough. That’s why we’re breaking down the Global Payments 2023 Commerce and Payments Trends Report for you. Read on to discover the top five trends in the payments space that small business owners like you can expect to hear more about in the coming year:

One more thing before we get started: If you aren’t familiar with any of these trends just yet, don't sweat it! Far from being behind, you’re about to get ahead of the game. Let’s go.

Physical, digital and virtual converge: 5 trends to watch

1. Social and live commerce charge ahead

First up, we have consumers’ new favorite place to shop. While scrolling social media and watching live-stream events are nothing new in terms of consumer behavior, the widespread rise of users making purchases while on these platforms is.

In other words, the preferred shopping venue of today’s consumers is now wherever they happen to be, physically and digitally.

While this might sound intimidating, it’s actually good news for your small business. Whether you’re restaurant or retail, the all-in-one combo of entertainment, shopping and social interaction that social and live commerce provide gives you something unique: a way to meet shoppers where they are, get your products or services in front of more eyes and convert casual browsers into genuine buyers.

Icon of social media interactions

Social commerce

With social commerce, consumers can buy a product or service directly from social networks they’re already using without having to leave the platform — think Facebook Shops, Instagram Shopping, Pinterest Shopping and TikTok Shop.

How? Embedding payment links directly into posts and ads right there on social media. You can also integrate payment links into other channels that didn’t previously enable commerce. Whichever channels you prefer, social selling could help your business unlock a new revenue stream.

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Live commerce

Similarly, live commerce lets businesses promote their products on screen during live-stream events, so consumers can see and buy products in real time. And it couldn’t be easier. Users make purchases with one click via “buy” links or by scanning QR codes shown on screen. This provides a quick path to purchase designed to encourage consumers to capitalize on those in-the-moment shopping impulses that businesses know and love.

Social commerce sales hit $492 billion globally in 2021. Expected to hit $1.2 trillion by 2025. 52% of businesses plan to sell through social networks in 2023. Live commerce projected to make up 10-20% of all ecommerce by 2026 and hit $55 billion in US sales.

2. Tech innovation: Blockchain, real-time payments and open banking take center stage

In 2020, the merge of physical and digital into a consistent omnichannel experience was the name of the game. This was largely due to the pandemic, as in-store transactions decreased and the demand for online payments and contactless payment options increased. Now, with the surge of augmented reality (AR) tech, virtual reality (VR) tech and more, we’re seeing the rise of virtual take over the payments landscape.

Here are the top three new technologies paving the way:

Blockchain icon


What is it? Much like the name sounds, blockchain is a chain of “blocks” that hold batches of digital information from transactions (like pages of a ledger). Each block is securely connected to the next using cryptography to prevent fraud.

Since blockchain 1) stores data and 2) records transactions, you can think of it as a digital database or ledger. The unique part? It’s a ledger that’s public, decentralized and distributed so no one person or business owns the system of record, instead relying on a network of computers to maintain it.

Why is it trending? Among other benefits, blockchain solves record-keeping problems, provides a public audit trail for all types of transactions, reduces transaction fees and increases the pace of payment processing with real-time verification of transactions that cuts out financial banking institutions as middlemen. It also rapidly and affordably facilitates peer-to-peer payments, payments across borders and transactions made with digital currencies (think of it as the rails digital currencies run on).

In short, it has the potential to make commerce more profitable for your business and more convenient for your customers.

While blockchain presents exciting possibilities, we’re still at the start of a trend that has a lot of maturing to do. Right now, its most eager adopters include the real estate, banking, financial, legal and payments industries. So, don’t feel like you have to jump on this one quite yet!

Mobile payment icon

Real-time payments

Slow and steady doesn’t always win the race…

What is it? Instead of the traditional payments process you’re used to where transactions are batched, sent to your business’ bank and processed at scheduled intervals, real-time payments process and settle those transactions instantly.

Why is it trending? While not all transactions are a good fit for real-time payments (like big purchases such as cars or homes that take time to ensure legitimacy), it’s an attractive option for most average ticket transactions. Why? As a small business owner, real-time payments put money in your pockets faster, which makes a big difference if you’re working with shallow cash reserves.

Financial institution icon

Open banking

What is it? If you’re not familiar, this technology allows third-party payment and financial services providers to access consumers’ financial data, including transactions and payment history, as long as they have one key thing — the consumer’s consent.

From a consumer’s perspective, open banking lets them aggregate their bank account balances from each of their banks onto one screen, so they can see all their money in one place, in real time. On top of that, this functionality eliminates the hassle of manually transferring money between different banks as users can make transfers directly through the open banking service.

Why is it trending? For one, it provides consumers better visibility into their whole financial picture, while increasing transparency between users and financial institutions.

And it doesn’t just apply to individuals. Small businesses can benefit from open banking too when it comes to managing payments, making real-time bank transfers and ultimately gaining better financial control.

Social commerce sales hit $492 billion globally in 2021. Expected to hit $1.2 trillion by 2025. 52% of businesses plan to sell through social networks in 2023. Live commerce projected to make up 10-20% of all ecommerce by 2026 and hit $55 billion in US sales.

3. Digital currency sees new use cases emerge

Now for a somewhat controversial trend, but a trend nonetheless: the acceleration of digital currency. With central bank digital currencies (CBDCs) and stablecoin in the mix, digital currency is more than just crypto.

Don’t work on Wall Street? Let's back up.

There are three main types of digital currency:

Bitcoin icon

Chances are if you’ve heard of any digital currency before, it’s this one. First and foremost, crypto is a form of digital money that uses an encryption algorithm (cryptography) to secure transactions. Remember when we talked about blockchain? Crypto runs on the blockchain infrastructure, which you know is a decentralized system. That means it does not have a central issuing or regulating authority in charge of it. What’s so important about that? Crypto transactions happen directly between you and the customer, eliminating the need for banks and other middlemen — aka the potential for lower transaction fees, less exposure to fraud and faster access to funds.

Stablecoin icon

This is a class of cryptocurrency known for being less volatile. While still based on blockchain technology, it differs by pegging its value to another asset like fiat currency (think the US dollar), gold or other commodities to stabilize its price.

Central bank digital currency icon

Central bank digital currencies (CBDCs)
Another form of digital currency, the big difference with this one is that it’s issued and regulated by a country’s central bank or official monetary authority. That means it’s essentially the digital form of a country’s fiat currency.

From bad actors to public scrutiny and shaken trust in the system, digital currencies have experienced their fair share of falls from favor. But despite the volatility, their popularity continues to grow. While we don’t expect crypto to be accepted at the point of sale anytime soon, it’s still worth keeping an eye on.

Here are three use cases driving the growing appetite for digital currencies:

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Cross-border payments and remittances

Unlike conventional currencies, digital currencies’ decentralized nature allows for fast, cost-effective and frictionless cross-border transactions. And the demand for it is bigger than you might realize.

An estimated 800 million people receive remittances — money sent from laborers working in developed economies to family and friends in the developing world — to pay for food, utilities and education. In 2021, global remittance inflows reached a new record of $773 billion.

If your small business makes cross-border transactions, or has employees who send remittances to friends and family abroad, you might want to watch how the cross-border market develops and how digital currencies' role in it evolves.

Loyalty and rewards icon

Loyalty and rewards

Do you offer a loyalty program to your customers? Digital currencies could come into play here too. This use case allows small businesses and their customers to exchange reward points for various cryptocurrencies — a practice that especially appeals to younger consumers.

While a digital currency rewards system offers potentially big benefits to businesses, the fluctuating prices of cryptocurrencies make some consumers wonder about the credibility of the reward points. If they get points today, what will their value be in a month? The jury is still out.

Cryptocurrency wallet icon

Cryptocurrencies in wallets

Our last use case is the crypto wallet — made for consumers and businesses alike.

Just like a traditional leather wallet holds cash and a digital wallet holds debit and credit card information, crypto wallets hold purchased cryptocurrencies, so you can send, receive and spend your crypto funds. Crypto wallets can run the gamut from hardware wallets that look like a thumb drive, to paper wallets that consist of private keys or passwords to your crypto written on physical paper, to mobile apps like Apple Pay®.

The key benefit for consumers? Access to finances and payment methods all in one place.

If you decide down the road you want to offer customers more ways to pay at your small business by accepting crypto payments, you can’t do it without a crypto wallet of your own. Keep in mind, just like you have separate checking and savings bank accounts, the recommendation is to have a minimum of two crypto wallets with one dedicated to housing your cash reserves and the other to sending and receiving payments.

Global cross-border B2B payment remittances worth $150 trillion. CBDCs can cut costs by 50%. 42% respondents cited redemption value of crypto points vs. more familiar points systems as top concern. 93.5% merchants report customers prefer to pay with PayPal, Google Wallet™ and Apple Pay. Just 6.5% favor crypto wallets.

4. Biometrics unlock new possibilities in payments

You already use this technology to unlock your smartphone. And you might even use it to track employee time and attendance. Next, you could use it to verify a payment.

If you need a refresher, biometrics uses physical markers to grant access to devices or information. With the simple, fast, secure and contactless experience biometrics provides, public acceptance is strong. And its next big frontier is likely payments. In fact, biometric authentication pilots in brick-and-mortars are already in progress.

Here are the four main biometrics models that could enter the payments ecosystem:

Biometric fingerprint verification icon

Fingerprint verification
When asked in the Global Payments survey, “Which type of biometric authentication are you likely to accept from your customers?” nearly 70% of businesses cited fingerprint as their number one choice.

Biometric facial recognition icon

Facial recognition
However, fingerprint isn’t the only front runner. When asked the same question as above, nearly 70% of businesses also reported face as their top choice, tying fingerprint recognition for first place.

Biometric iris recognition icon

Iris recognition
As a newer form of biometrics, the public is less familiar with this one — and the numbers reflect that. In the survey, only 32.6% of businesses said they’re likely to accept iris authentication from their customers.

What’s next for biometrics?

Beyond fingerprint, face and iris, the next wave seeks to use other aspects of human behavior as biometric markers to facilitate payments and seamlessly authenticate a customer’s transaction at checkout. For example, how fast a person types, the way they walk, how they hold their phone or move their mouse could all serve as behavioral markers.

86% businesses interested in using biometrics to verify identity or make payments. 19.8% will invest in biometric authentication in 2023. 74% consumers feel positive toward biometrics. 70% think biometrics are easy. 46% think they are more secure than passwords or PINs. Consumers concerned about biometrics data. Businesses struggle to stay compliant with biometrics regulatory environment.

5. The metaverse dawns

Coming in as our fifth and final trend to watch, the dawn of the metaverse is here.

But what is it? Well, the short answer is that it’s still being defined. However, most agree it’s the blending of digital and physical realities to create immersive customer experiences that give users a real-life “feel” while in virtual spaces.

Why should you care as a small business owner? While it’s just getting started, the metaverse holds possibilities for the future:

  • Access to a new marketplace where you can reach new pools of potential customers

  • A fresh, new venue to market your products outside of clogged social media feeds and overloaded email inboxes

  • A way to level up your ecommerce site with virtual experiences like 3D models that let customers browse your products via AR

  • The opportunity to monetize intellectual property and virtual goods, opening up a whole new line of products

Here are the two main metaverse commerce models to watch:

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Direct-to-avatar commerce

If you need proof that we’re living in a digital world, look no further. The direct-to-avatar business model consists of businesses selling virtual products directly to consumers’ avatars — no physical products involved. An example would be shoppers buying digital clothing and accessories to enhance their avatar’s appearance.

Augmented reality icon

Virtual-to-physical commerce

On the other hand, this model involves making a purchase in a virtual space then exchanging the virtual item for a physical product or experience.

Non-fungible tokens (NFTs) are a great example. Never heard of them? NFTs are a type of crypto that run on the blockchain. However, every NFT is a unique certificate of ownership for a virtual item — or a virtual item that can be exchanged for a physical one. For example, if your customer had a NFT representing ownership of a designer t-shirt from your business’ limited edition line, they could exchange the NFT for the physical item (since they already own it).

Although an abstract concept, the numbers are concrete: The global NFT market is growing at a CAGR of 33.7% and will be worth over $230 billion by 2030.

There are 400 million metaverse users globally. 1 in 6 businesses plan to set up metaverse presence in 2023. Using virtual reality for 20 minutes generates over 2 million unique data elements. Top 2 reported metaverse risks are data privacy and cybersecurity.

That’s a wrap. Ready to embrace the future of payments?

If your head is spinning after all that information, don’t worry. You’re ahead of the game, not behind, remember? This guide was built to help you prepare for the future. And we’re here to support you through next steps.

While it’s a great idea to put everything we just covered on your radar and keep a weathered eye on the horizon as these trends continue to evolve, don’t stress about adding all five to your business today.

Stay in contact with your payment provider to keep up to date with the latest developments and talk strategy for which trends to fold into your long-term plan.

As for the financial technology (fintech) that’s crucial to your business’ success right now, read about the six types of must-have payments functionality.

Heartland offers powerful payment processing solutions that allow you to accept all the ways customers want to pay — debit cards and credit cards, digital wallets, contactless payments and more. From in-person, to text to pay, to QR codes, our payments management software has everything you need to easily process payments in store and online. Plus, you can provide a better overall buying experience for your customers by quickly sending easy-to-use “Pay Now” links embedded in your emails, effectively moving funds to your account quicker.

We also offer the added convenience of eBilling and invoicing, financial services add-ons and predictable, flat-rate pricing and fees. In addition to payments technology, you can count on expert service on your schedule with 24/7, US based customer support.

Reach out to our team anytime to learn more and discuss which payment solutions might be right for your business — today and tomorrow.

Apple Pay© is a trademark of Apple, Inc. All trademarks contained herein are the sole and exclusive property of their respective owners.

Google Wallet™ is a trademark of Google, Inc. All trademarks contained herein are the sole and exclusive property of their respective owners. Any such use of those marks without the express written permission of their owner is prohibited.

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