Payment Tech Trends to Look Out For in 2021Shayna Wills
2020 has been a year that most people would prefer to forget ever happened. In between the massive lockdowns that have stopped consumers from walking into stores to the uncertainty about reopening, many retail businesses shut their doors for good this year. However, out of every crisis comes innovation. Companies were already investing in the digital landscape, but 2020 made that investment pay off in a big way. With so many consumers still wanting to shop yet unable to do so in person, e-commerce became the go-to option for buying anything.
Digital payments and e-commerce aren’t anything groundbreaking. The concept of digital sales is almost as old as the internet itself. However, while 2020 didn’t introduce digital innovations for payments, it hastened the technology’s adoption. These new trends are likely to form a massive part of digital commerce in 2021. With the state of the world being the way it is and uncertainty about the availability of a vaccine, these payment innovations may be vital to ensuring the economy doesn’t stagnate. But what are these innovative payment tech trends that 2021 may offer us?
Mobile Shopping Poised to Dominate
We’ve already noted that e-commerce, in general, has seen massive growth. Marketing Charts mentions that Cyber Monday sales this year increased by 15.1% over last year. As many of us know, using a desktop or a laptop to purchase stuff from retailers is standard fare. Pew Research noted that, during the pandemic lockdowns, more than half of Americans stated that the internet was vital to their daily lives. Buying groceries or even gifts no longer required running over to the local store. Scheduling groceries and paying for them in advance made life a lot easier for many people during the pandemic. However, the medium with which users interacted with these websites also changed significantly.
E-Marketer tells us that almost six in ten Americans prefer to shop using their mobile device. This shift in perspective is expected. More people are downloading shopping apps to keep buying during the pandemic. With companies focusing on a good user experience and app interface, consumers can shop seamlessly using their mobile phones. With built-in payment processing and product suggestions that keep users returning for more, it’s not a surprise that so many people are switching over to mobile. Even though the convenience has been available for some time, many consumers never bothered to use it until now.
We’ve already seen how many users are migrating to mobile purchasing, and in direct correlation to that statistic, digital wallet app popularity is also on the rise. Many of the original digital wallet technologies were developed by names you’ve heard of. Apple Pay, Google Pay, and Click to Pay all came from partnerships between technology giants and credit card companies. The result is a highly secure system of transferring funds from a buyer to a seller. The adoption of digital wallets during the pandemic has surged along with online e-commerce. In fact, according to a recent survey from The Strawhecker Group, 81% of consumers have used one-click or saved account payment methods at least once before.
Despite their popularity with consumers, digital wallets tend to be a lot less prevalent in business-to-business sales. Most B2B companies don’t accept digital wallet payments, but this might change, seeing its popularity among the B2C crowd. Card companies are already looking at expanding their services into the B2B sector by offering payment gateways for use with B2B suppliers. Retail tends to be the proving ground for payment software. The success of digital payments in B2C sales makes it a prime contender for adoption by commercial suppliers. We may yet see digital wallets become an acceptable payment option for companies further up the supply chain.
Buy Now Pay Later (BNPL)
Credit and layaway are the foundation of much of America’s prosperity. BNPL is the modern version of these older payment methods, but it comes with a modern spin. They’re best compared to point-of-sale loans, where a payment processor would pay off the amount that the consumer owes and then bill them over a few months. Missed payments would generate a penalty fee, and like all short-term loans, interest rates may be a bit steep. It’s an innovative way to offer consumers payment options. With unemployment so rampant, it may be the only way for some consumers to afford essential goods.
As more consumers start using BNPL to pay for necessities like groceries, businesses may begin to adopt the technology more wholeheartedly. For commercial entities, having a payment gateway that can manage the details of BNPL alongside standard payment options like credit and debit cards is a necessity. Pivoting into this sphere of digital commerce offers consumers a lot of choices, but the retailer needs to support the full range of payment options, or they risk losing the consumer. We’ll likely see more retail businesses accept BNPL for payments in the coming year to help cope with lowered income from their regular customers. Their choice of payment processor becomes a crucial consideration to manage the costs to the business.
Payment Gateways Are More Important Today Than Ever Before
With consumers now concerned with every cent they spend, retailers need to offer a broader range of payment options to conduct business. Commerce is no longer the exchange of cash but rather digital funds for goods and services. Payment processors are crucial to keeping the costs down for both consumers and the business. A well-integrated payment platform gives a business place flexibility, but it also allows the consumer to choose a payment method that suits their personal preference.
COVID-19 has changed how the world does business on a fundamental level. Gone are the days where cash ruled the roost. Now, with the added risk of infection from human interaction or handling items, more people are opting for contactless payments, mobile payments, and online shopping to meet their obligations. A business that wants to be competitive into 2021 would do well to find a payment gateway provider like Cardknox that offers support for all of these options and more. As with most things, the landscape of digital payments is always evolving. Choosing the right digital payment processor should take that fact into account.