AI and Embedded Finance Reshape Commerce and Payments by 2025

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The commerce landscape is undergoing a significant transformation, driven by artificial intelligence (AI) and embedded finance. This shift is projected in Global Payments’ recent report, which delves into the key trends poised to redefine payments and business engagements. The report offers insights from a comprehensive survey of 600 global professionals responsible for technology investments and payment decisions. This compendium of both qualitative insights and quantitative data paints a clearer picture of the evolving payment experiences and the technologies driving them.

The Role of AI in Commerce

AI stands at the forefront of the technological revolution reshaping business efficiencies, security measures, and customer engagements.Small and medium-sized enterprises (SMEs) find AI to be a particularly cost-effective tool, capable of automating mundane but essential tasks such as payroll and human resources functions. In addition, AI generates marketing reports and serves as virtual assistants, which further enhances operational efficiency. The enthusiasm for AI adoption is evident, with an impressive 94% of SMEs having implemented, tested, or actively used the technology in some capacity.

AI’s impact extends to critical areas like fraud detection and biometrics, where it plays a pivotal role in enhancing security.Despite larger enterprises expressing concerns about data privacy, AI adoption within this sphere has marked a considerable shift. SMEs have especially embraced AI for tap-to-pay or tap-to-phone transactions, with 67% integrating these functionalities.The ability of AI to identify purchase trends and furnish credit scores greatly benefits businesses, providing deeper insights into customer transactions and helping in making well-informed decisions swiftly.

The Rise of Embedded Finance

Embedded finance has expanded its influence from consumer transactions to the realm of business-to-business (B2B) dealings, introducing a revolutionary approach to payment methods within supply chains. According to Global Payments’ survey, most enterprise-sized businesses have been utilizing embedded payments for over five years. This signifies a substantial experience base that positions these businesses at the vanguard of this transformative trend. The sectors of retail, automotive, and hospitality are notably proactive in adopting embedded payment solutions, which markedly enhance operational efficiency and reduce overall transaction costs.

This trend is not just restricted to large enterprises. Smaller and mid-market companies are also ramping up their investments in embedded finance, understanding its capacity to streamline processes and drive growth.The survey indicated that 76% of enterprise-sized entities had more than five years of experience with embedded payments, while 82% of SMEs and 63% of mid-market participants plan to bolster their investments within the year. This widespread adoption underscores embedded finance’s potential to redefine payment methods across various industries, making it a critical focus for future developments.

Payment Orchestration

Payment orchestration technologies enable businesses to manage transactions across multiple providers seamlessly, revolutionizing the landscape of digital payments. This capability has seen extensive adoption, with 76% of businesses reporting more than five years of experience using payment orchestration platforms.Such prolonged exposure highlights the technology’s effectiveness and reliability. The commitment to payment orchestration continues to grow, with 35% of companies poised to increase their investments in the coming year. These investments are driven by the need to improve security, operational efficiency, and customer experience.Key advantages of payment orchestration reported by survey respondents include enhanced security and fraud prevention (89%), increased operational efficiency (84%), heightened customer experience (83%), and better accessibility (83%). The ability to unify transactions across providers not only optimizes the payment process but also offers a holistic approach to handling diverse payment methods, which is crucial in an increasingly digital marketplace. This trend reflects an essential shift towards a more integrated and secure payment ecosystem, facilitating smoother and more efficient business operations.

Unified Commerce Platforms and Retail Innovations

Unified commerce platforms are becoming increasingly indispensable as businesses strive to offer seamless shopping experiences. Global Payments’ report reveals that a significant portion of retailers has been leveraging these platforms for over five years. These retailers, along with smaller and mid-market companies, demonstrate a keen interest in further investment in unified commerce technologies.The aim is to integrate various shopping channels, creating a cohesive and streamlined customer experience. Innovations like “search-to-purchase” functionalities and live commerce are also gaining substantial momentum. These technologies empower consumers to discover and buy products directly through social media or live-streaming events, enhancing convenience and engagement.Smaller enterprises are leading the way in adopting unified commerce platforms, with 67% of SMEs and 71% of mid-market companies actively investing in this technology. This trend underscores a strategic shift towards leveraging advanced digital tools to meet evolving consumer expectations. Additionally, about 29% of respondents have already incorporated live commerce into their strategies, reflecting the growing importance of real-time product showcases and sales.This multichannel approach not only broadens reach but also ensures a more engaging and interactive shopping experience, pivotal in today’s competitive market.

The Importance of Physical Stores

Despite the surge in digital channels, physical stores continue to play a crucial role in business strategies. According to the survey, 55% of the surveyed enterprises consider physical stores a very high or high priority, following close behind mobile and e-commerce channels.This finding highlights a balanced approach where businesses value both digital and physical presences, recognizing the unique advantages each brings. Physical stores offer tangible experiences and personal interactions that digital platforms cannot fully replicate, which remain significant in the overall customer journey.The continued emphasis on physical stores suggests that businesses are strategically blending online and offline channels to optimize consumer engagement. While digital platforms provide convenience and accessibility, physical stores offer experiential shopping and immediate gratification of product acquisition. This dual-channel strategy allows for a more comprehensive reach, catering to diverse consumer preferences and enhancing brand loyalty. The future of commerce, thus, lies in seamlessly integrating these channels to offer a holistic and versatile shopping experience.

Advanced Security Measures

The commerce landscape is experiencing a monumental transformation, primarily driven by artificial intelligence (AI) and embedded finance. This evolution is captured in recent findings by Global Payments, which highlight the emerging trends set to redefine how payments and business relationships function.The detailed report is based on an in-depth survey of 600 global professionals who are instrumental in making technology investments and payment-related decisions. By offering a mix of qualitative insights and quantitative data, the report provides a clear overview of the new payment landscapes and the technological advancements propelling them forward.AI is gradually becoming more integrated into day-to-day financial transactions, leading to more personalized, efficient, and secure payment experiences. Similarly, embedded finance is enabling companies to offer financial services directly within their platforms, enhancing customer experience and streamlining operations. Together, these trends are reshaping the way businesses interact with their customers, making transactions more intuitive and seamless than ever before.

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