Innovation

ChatGPT, a conversational AI model built by OpenAI, is the most talked-about technology of 2023. And it has piqued the interest of insurance industry leaders. But where exactly will ChatGPT, and generative AI broadly, have the greatest impact? And what are its most and least promising use cases?

• Cash and checks are declining but not disappearing.
• Debit, credit, and prepaid cards will compete for growing digital spending.
• FedNow's launch could increase the prominence of bank-based payments and intensify competition.

Although debit still reigns supreme, with consumer preferences moving toward digital, cash and checks will continue to be displaced in the US. 

• While most retail sales still occur in-store, digital is driving innovation as ecommerce grows.
• Domestic P2P and digital remittance providers will diversify to lure users and monetize solutions.
• Digitization is dominating B2B and disbursement innovation.

Ongoing ecommerce growth is pushing payment providers to make efficient and inexpensive digital payment solutions their top priority despite the ever-changing post-pandemic landscape. 

• POS infrastructure providers are scrambling to align their offerings
• mPOS providers are trying to balance demands from upmarket sellers and micromerchants
• Payment gateways must double down on omnichannel to woo customers

As the landscape of market leaders shifts, we forecast that the US point-of-sale (POS) terminal installed base will grow from 17.3 million this year to 20.2 million in 2026, largely due to providers upgrading technology. 

• Acquirers and processors are competing to enhance their value propositions
• Card and automated clearing house (ACH) payment networks are dueling for volume
• Issuers can lean on customer relationships and tranches of data to respond to innovation

Amid economic uncertainty, payments providers are making meaningful shifts to digitize and innovate as they continue to grow at a projected 8.3% compound annual growth rate worldwide between 2021 and 2026, per Boston Consulting Group.