6 payments trends to watch in 2023


Innovation in payments will charge ahead in 2023, though not in the same way it has in the past few years. With venture capital firms tightening purse strings and startups floundering, legacy players are likely to pick off some industry small fry.

Meanwhile, other fintechs may close down amid challenging economic conditions, including rising borrowing costs and the threat of a recession.

One new payments area primed to advance in any case is embedded finance, and specifically embedded payments — the practice of bundling payments with a service or product in a seamless sort of way. Companies across the spectrum are considering ways they can employ such tools and they’re likely to move beyond consumer uses to corporate applications as well.

The arrival of FedNow, the Federal Reserve’s real-time payments system, is also expected to spur not only more efficient payments, but also new rails for developing services and inspiring more startups in the industry.

While buy now-pay later mania has cooled since the COVID-19 pandemic fueled online use, it will continue to be a hot theme in the industry as it adjusts to in-store use and new regulations in the offing for 2023.

Meanwhile, regulators won’t be the only ones keeping an eye on consumer safety. Lawmakers and payments companies alike will join in a campaign to beef up cybersecurity in the arena amid the rise of digital payments.

FedNow on the way

There are high expectations for FedNow’s launch, which could come as early as May, with industry participants wagering it will super-charge the use of faster payments in the U.S. and spur innovations.

The new national system allowing payments of up to $500,000 to be made in seconds on any day and at any time may also allow the U.S. to catch up with other countries already speeding ahead with the technology.

The system will build on an existing private sector real-time payments network, RTP, begun by bank-owned The Clearing House in 2017. While RTP roped its big bank owners into the real-time fold, FedNow is aimed at luring more small- and mid-sized banks.

“In 2023, in the U.S., real-time payments will start becoming real,” said Sanjay Gupta, who heads the biller segment at payments company ACI Worldwide. Instant payments have been transformational in other countries, he explained. Now, U.S. companies, including ACI, are ready to make use of real-time payments too, Gupta said in an interview last week. 

ACI Worldwide executive Sanjay Gupta

Sanjay Gupta

Permission granted by ACI


More banks using real-time systems will mean more U.S. businesses have access to those services through their financial institutions and can increase the efficiency of their payments. 

As more companies adopt real-time payments, it will allow them to upgrade other aspects of their payments and finance infrastructure, Modern Treasury CEO Dimitri Dadiomov said in an interview this week.

While the service might seem pricey relative to automated, or ACH, payments, it’s less expensive than wire transfers and more efficient than check-writing, Dadiomov noted. Plus, over time as FedNow, The Clearing House and banks compete for real-time customers, the prices will move lower.

“All in all, I think it’s going to be a pretty significant, if not the dominant type [of payment], in a couple of years,” he said of real-time payments. “I don’t really think of cost as a big obstacle.”

Eventually, digital requests for payment are likely be a bigger part of the real-time realm too, Dadiomov said. RTP has “been kind of like a send-only way of using it,” Dadiomov said.

Needless to say, the rise of digital payments is also likely to boost business-to-business payments as companies realize the benefits of faster payments, especially in a high-interest-rate environment that increases the importance of holding money, Dadiomov said. Instant payments can also increase cost savings.

“Given the market environment, the main priority for people is efficiency,” Dadiomov said. Payments and operations in the office of the chief financial officer are key places where they can increase those efficiencies, he explained. 

Eventually, real-time payments will also improve cross-border payments, but that won’t happen this year, according to Dadiomov. 


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