5 payment trends that are transforming business
Payment trends are constantly changing. We're here to help you stay on top of the latest developments
There’s no doubt 2020 was a difficult and transformational year for many.
The same goes for the payment industry, where digital shake-ups have stimulated the growth of several key trends for 2021 and beyond.
Below are five of the biggest payment trends to keep an eye on for businesses who want to innovate and bounce back from 2020.
Usage of contactless cards and mobile touch-free payments has accelerated in the last year, primarily due to safety concerns during the pandemic.
However, the simplicity and convenience of ‘tap and go’ payments is likely to sustain this growth beyond the health crisis.
While contactless payments were popular mainly among millennials pre-pandemic, now people across all generations are embracing contactless as their go-to payment option.
In fact, Visa’s Back to Business Study found that offering contactless payments has become a ‘driving differentiator’ for most consumers, with 63% saying they’d switch to a business offering contactless options over a business that didn’t.
This is also encouraging for the growth of more contactless options like eWallets and mobile apps.
QR codes in particular are expected to make a major comeback for instore contactless payments, as consumers simply pay via mobile and present the QR code to the merchant for scanning.
Smart devices and AI software
Contactless payment trends are expanding beyond cards and smartphones to wearable devices like smart watches, fitness trackers, and headsets.
While payments using smart glasses, hair bands, or even face masks are yet to catch on, artificial intelligence and machine learning software are rapidly developing in the payment industry.
AI and ML are vital in preventing fraudulent cybercrime, reducing transaction errors, and gathering valuable insights to further optimise and automate payment processing.
Tools with embedded AI like apps and chatbots or virtual assistants streamline the customer experience by identifying and handling things like transaction notifications, spending habits and history, and preferred and alternative payment methods.
Virtual assistants with speech-to-text conversion and vice versa will enable people to initiate and confirm in-app payments simply using their voice.
Voice payment technology could become the ultimate contactless option, and is already in the works for companies like Amazon, Apple, and Facebook.
Omnichannel unification for ecommerce
The rise in contactless and digital payment trends leaves many businesses no choice but to expand their payment options, especially online.
Simply offering cash or card is no longer enough - let’s not even get started on how outdated cheques are.
IBM suggests that the pandemic has accelerated the shift towards predominantly digital shopping by five whole years.
It’s now beyond time for businesses to modernise and invest in innovative technology to offer more payment channels and attract more customers if they want to survive.
Some of the ways that businesses can diversify their digital payment options in 2021 include offering:
‘Click and collect’ payments for instore or curbside pick up
Payment with applications like Apple Pay and Google Pay
Scannable payment tokens or QR codes
Buy now, pay later or installment options
Payment on delivery
Loyalty programmes to collect points per payment
Businesses can implement these solutions now to prepare for the growth of cashless payment in 2021. This will help them to make payment easier and faster for customers, while also helping to increase sales.
One way to integrate various secure payment methods is to unify them through cloud technology and open banking.
These innovations can help to bring together point-of-sale capabilities and customer management, inventory, and sales fulfilment platforms, making digital payments easier to access and operate.
Cloud computing lets businesses move away from static systems and combine their existing platforms with cloud-enabled services for speed, reliability, and scalability.
Meanwhile, automated open banking technology improves the efficiency and security of transactions requiring communication between multiple financial organisations.
These digital payment gateway trends are expected to pick up in 2021, with cloud technology anticipated to grow by 17.5% by 2025 and open banking to grow by 24.4% by 2026.
Embedded fintech for seamless payments
Enabling seamless payments by embedding payment options in existing applications is the way forward for digital payments and improved customer experience.
Think about services like Uber - where consumers only have to provide payment details in the app once, then they can simply book a ride without having to sort out a payment transaction every time.
They know it’s secure, and there’s added value to every transaction when users can also earn credits with every booking.
These days nobody wants to fill out long forms or file paperwork to be able to make a payment.
They want a quick and frictionless transaction, where software allows them to securely and directly authorise a payment without leaving the app they’re using.
This is becoming more and more evident through social media, where sites like Facebook and Instagram are already integrating ‘buy now’ buttons on posts and within messaging.
One-click payment options are also becoming more prevalent on ecommerce sites, where users can buy in a second without having to go through a several-step checkout process because their payment and delivery data is already safely stored.
Embedded financial technology is another step in the omnichannel unification process we talked about above, making the most of automation technology and contactless payments.
We can expect to see embedded fintech in voice-activated chat payments and pay-by-text options as well.
Improving payment access
One of the problems with rapid digitalisation in the payment industry is that lots of people can get left behind.
Not everyone has the physical access to a bank required to set up an account, and rely on ‘unbanked’ cash.
It’s vital to open e-payments up to everyone, everywhere, in ways that traditional payment systems weren’t always available.
The innovative technologies we’ve discussed above are some of many that are helping to improve financial inclusion around the world.
And with 45.4% of the global population owning a smartphone and the rise of 5G connectivity, digital payments are quickly becoming the most accessible option.
Investing in digital payment solutions allows more people to access your business and participate in commerce, especially more vulnerable populations.
At this point, there’s no excuse not to embrace and leverage these payment trends.
The pandemic-induced seismic shift in payment behaviours means that investing in these forward-thinking trends is now a necessity for businesses that want to offer exceptional services, and not only survive but thrive in the post-pandemic digital payment landscape.
This article does not necessarily reflect the opinions of the editors or the managment of EconoTimes