How payments tech is evolving to meet today's challenges

Payments technology fintechs have been flying high in recent years, but have seen their stock prices and valuations drop significantly in 2022 in what experts consider to be an overdue course correction.

"Investors and entrepreneurs attracted by payments market fundamentals and the opportunity to create real value, and of course plenty of hype, fueled payments fintech valuation inflation," said Eric Grover, a principal at Intrepid Ventures.

Despite this, payments tech innovation is likely to stay strong. "Bringing fintech valuations closer to terra firma doesn't change payment-market fundamentals," said Grover. "Small enhancements to payment systems can be worth a lot to consumers, merchants, banks and tech firms."

Read more: What the market slump means for payments tech

Biometric payment cards with contactless technology that use fingerprints for authentication instead of PINs are being given the opportunity to establish a foothold by certain banks in Europe, Latin America and Asia, despite the recent growth of mobile options.  

"They've been saying cards are doomed to die for 20 years, but surveys continue to show that even though mobile payments are gaining ground, cards are still preferred by consumers," said Michel Roig, head of payment and access at Swedish biometrics software firm Fingerprints.

However, analysts feel that biometric card technology is less likely to be taken up in the U.S. "We're going to see more app-based payments at the point of sale," said Alisa Ellis, global head of innovation and emerging products at Discover Financial Services.

Read more: Why fingerprint biometric payment cards may bypass the U.S.

Horizon Worlds, the brainchild of Meta CEO Mark Zuckerberg, is breaking new ground in the virtual reality environment with plans for payments that will allow creators to sell virtual items and other content on the platform.

"The selling of virtual assets is a proven revenue model, so you can understand why Meta is testing it — particularly as [it] looks for new revenue streams that don't rely on capturing customer data for advertising," said Danny Stefanic, CEO and founder of virtual events platform MootUp.

Perhaps not surprisingly, the announcement of Meta's plans, which also include a new virtual currency and non fungible tokens, was made jointly — by Mark Zuckerberg and his virtual reality avatar.

Read more: Meta has a new plan for payments