2021 Payment Trends Poised to Make Big Impact
Retailers, restaurateurs and other merchants have made significant changes to adapt to health and safety requirements, evolving consumer preferences, and competitive new channels in 2020. Because your users' businesses are changing, the total solutions you provide must adapt as well.
Factor in these six payment trends, driven or accelerated by the pandemic, into your business and growth plans for 2021.
1. Payments must support omnichannel experiences
The number of e-commerce transactions rose sharply in 2020. In the first six months of the year, U.S. merchants report that consumers spent $347.26 billion online, up 30.1 percent from the same time in 2019. However, that's not the entire story. Once shoppers made their online purchases, they may have opted to buy online pickup in store (BOPIS), take advantage of curbside pickup, return items to a store that they purchased online, and earn loyalty points with their purchases that they'd later redeem on any channel.
The ideal solution gives merchants payments visibility and management from a centralized platform, making shopping, pickup, and return experiences as frictionless and customer-friendly as possible.
2. Consumers embrace contactless payments
U.S. contactless payment adoption has lagged behind the rest of the world, but now that consumers are more conscious about the health risks of touching shared devices – such as PIN pads – retailers need to rethink checkout experiences. Near-field communication (NFC) technology enables contactless transactions using mobile wallets or contactless cards. However, merchants are looking beyond those solutions to implement touchless experiences more quickly and offer them to customers who don't have contactless cards or mobile wallets.
QR code payment is a promising option. In these transactions, consumers scan a printed QR code with their smartphones' cameras. The code directs them to a payment page, similar to an e-commerce checkout page, to complete the transaction.
Kyle Pexton, President and CFO of NMI, predicts, "Contactless payments will extend into commercial off-the-shelf offerings, whereby payments will be accepted by anyone in a ubiquitous fashion, limited only to the device you carry in your pocket."
3. More shoppers use self-checkout
A Forrester study in 2018 found that 70 percent of shoppers have abandoned shopping trips and long lines were the most common reason. The survey also revealed the 65 percent of shoppers would use self-checkout to avoid a long wait in line. And that was before the pandemic. Consumers are even more reluctant now to stand in line for long periods, forced to be in proximity to others.
In addition to point of sale (POS) solutions designed for face-to-face in-store transactions, also ensure you offer retailers self-checkout solutions integrated with a full-featured payments platform for easy-to-use, secure, unattended transactions.
4. Biometric payments
Consumers are growing more familiar – and comfortable – with authenticating payment biometrically. Many use their fingerprint to authorize payment from their smartphones. Expect payment trends in 2021 to include more biometric payment adoption. For example, Amazon is testing its Amazon One platform, which enables consumers to pay by scanning the palms of their hands. This technology may also be used for loyalty program authentication or to replace ticketing to enter a stadium.
Form partnerships that will enable your users to leverage biometric payment and identification to create their customers' best possible experiences.
5. Payment devices do more than accept payments
Payment devices are at the hub of in-store activity. Look for them to begin to drive more than payment experiences. Merchants will begin to increase the ROI from payment devices by using them to capture customer data and feedback on the service they've received.
Your partnership with the right payments company can expand payment devices' functionality and the value they provide your users.
6. The banking evolution continues
Pexton also points out, "We are on the cusp of significant changes in the banking industry as they will shift mainstream in 2021. This includes open banking, a continued increase in digital-only banks and traditional banks shifting their business models to stay relevant in our ever-changing world."
The types of payments your users now accept for both card-present and card-not-present transactions may change to keep ahead of this payment trend.
Payment Trends Are Everyone's Trends
ISOs and software developers must remember, especially when vetting potential partners, that payment companies must be technology companies first. All other aspects of a merchant's IT environment, and subsequently, their efficiency and ability to provide optimized customer experiences revolve around payments.
Vendors leading the way in payment trends, such as contactless payments, omnichannel solutions, unattended payments, and biometrics, will be most successful in meeting merchants' needs during this era of rapid change and adaptation. Choose those payments companies as your partners to help you build the strongest, long-lasting relationships with your users.