Consumers have more choices than ever before when it comes to paying for goods and services. More consumers are open to new technology and new payment solutions.
According to squareup.com, nearly 60% of consumers are open to new digital shopping options and almost 70% of consumers say the pandemic permanently changed the way they pay, according to a study from Visa.
Methods such as contactless pay and curbside pickup stayed popular among consumers, and most are not interested in returning to old methods of paying. Cash is no longer king. According to statista.com, only one out of ten point-of-sale purchases is paid for with cash. And a study from the San Francisco Federal Reserve Bank says 75% of shoppers prefer cashless methods for payments.
Digital wallets. Online payments. Mobile phone payments. Buy Now Pay Later. QR Codes. These are some of the top payment trends gaining popularity among shoppers and being embraced by more retailers. In fact, according to the Squareup.com report, more than a third of retailers are planning to implement new payment options.
Digital Wallets
This is one of the fastest growing payment methods. A digital wallet is a “financial app that allows people to store money and make transactions on a mobile device such as a phone or a tablet.”
According to Payment Wallets, by the end of 2024, digital wallets are forecast to account for half of all e-commerce payments.
One of the biggest reasons is it saves retailers time because digital payments are three times faster than non-digital methods.
New Ways to Pay
Convenience for consumers is often sitting in the palm of their hand – through mobile and text payments.
One in five consumers wants to be able to buy items via text message, according to the retail report from Squareup.com.
The report recommends that to “keep shoppers coming back”, more retailers need to embrace this new technology. Adding a live chat option is another way to serve your customers.
Buy Now, Pay Later
This is one payment trend that skyrocketed in popularity during the pandemic. Both shoppers and retailers embraced this method, which allows consumers to make installment payments over a short period of time (typically three to six months) According to the Consumer Financial Protection Bureau, the dollar volume of BNPL loans increased by more than 1000 percent from 2019 to 2021 and is forecasted to keep growing over the next several years. It offers a viable alternative to shoppers who do not want to go into debt.
A Motley Fool study found 37% of consumers use Buy Now Pay Later to avoid credit card interest and credit card debt.
QR Codes are IN
Contactless payments for in-store purchases also emerged as a convenient and safe way to pay for transactions during the pandemic. QR codes also allow businesses to make changes on the fly. According to pyments.com, about a third of consumers like using QR codes and they are also beneficial to reach potential new customers. The retail report from Squareup.com found one in five shoppers would “window shop” with a QR code. And it is not just retailers, according to the website Ivanti, 37% of restaurants have QR codes for payments.
This growing trend continues to gain popularity and according to Globe Newswire:
The contactless payments market is expected to hit more than $20 billion in revenue by the end of the year 2026.
Shopify reports the number of merchants that accept contactless payments through its software increased by 122% during the pandemic. And according to a report from Raydiant, more than 80% of consumers use contactless payments.
Two other popular trends in the payment industry are automation of payments and self-checkout. They also offer convenience to both merchants and consumers, and both are gaining traction among both groups.
Automation
Automation and artificial intelligence (AI) are also impacting the payment industry in a positive way. Automation has many benefits for businesses by offering efficiency, accuracy and potentially more profitability. More retailers are moving toward automation. According to Squareup.com about 40% of retailers plan to automate their operations by the end of 2024.
Consumers are also more open to automation. In fact:
Three-quarters of shoppers say automation technology would not keep them from shopping with a retailer and about half welcome the new trend.
Self- Checkout
If you have been to a grocery store in the past few years, chances are you have seen or even used self-checkout whether in a traditional grocery store line, at a stand-alone kiosk or by using a mobile device. Self-checkout stations offer speed, convenience and safety. This technology also gained popularity during the pandemic as retailers worked to implement new, contactless technologies.
They are growing in popularity too. According to Squareup.com’s retail report, nearly 40% of shoppers like to use kiosks to place an order or checkout after shopping. And a similar report from pyments.com found two out of three shoppers would like to have the option to use self-checkout on their mobile device.
Keep it Secure.
With the various technological advances and options available to retailers, security can also be a concern for both shoppers and merchants. Data privacy and cybersecurity continue to be a top priority and a top risk for all.
One way to provide protection is for retailers to make sure they are using a PCI-compliant payment processing system.
Red Maple can also help retailers achieve extra layers of security with their patented software, Clever Division.
Clever Division safeguards a customer’s credit card information with its innovative technology that divides, scrambles, and deletes key credit card data. This makes it virtually worthless for cybercriminals to steal the data because the merchant never stores the entire credit card information.
As these payment solutions continue to grow in popularity, it is imperative that retailers and other businesses keep up with the trends and the security measures it takes to offer them to their customers.
You can find out more about Clever Division and the many other software solutions that Red Maple offers at www.redmaple.com.
FAQS
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What is a digital wallet?
Quite simply, it is a financial application – or app – where you can manage your money, make purchases and a variety of other transactions on a mobile device such as a phone or a tablet.
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Why are QR codes popular among retailers?
This technology is quickly gaining popularity with merchants and other businesses because it is safe and easy to use – allowing businesses to make changes quickly and easily.
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What is one of the main reasons shoppers like to use Buy Now Pay Later?
One of the biggest draws for consumers is that BNPL offers a payment plan without interest and helps shoppers limit their credit card debt.
