With contactless payment, e-wallets, digital currencies, and growing fintech firms, the payment space is seeing major upheavals, disrupting the financial markets as never before. The adoption of new means of payment has been gaining traction, while more people and businesses swap bills, coins, and checks for mobile wallets, peer-to-peer apps, and other technological models. Fintech firms such as PayPal are diversifying their offerings, developing into full-fledged financial services that are paving the way to the future of payments.
Ease of use, convenience, and the possibility of instant payments have customers expecting digital payment methods of businesses. Customer behavior is therefore seeing a major shift toward technological methods, as businesses try to keep up and adapt to the new ways. The payment industry is being upended as digitization progresses at an increasing rate, reinventing the payment experience as we know it.
The fast-paced digitization of payments
Digitization is the name of the game in many an industry today, and it has now also taken over the financial world. Never before has there been such a drastic and fast change in payment options as last year, which had consumers and businesses move to the digital realm to shop and do business. Contactless credit card payments and mobile wallets have become a go-to solution for cashless checkouts at land-based stores, while e-wallets with instant payments have become the norm in the online space. Consumers are changing the way they make payments as they experience the increased convenience and speed of digital options.
While these have previously been nice to have, technological alternatives to traditional methods have now become integral for businesses to attract and retain customers. However, it’s not only in the business world where digital payments have become increasingly popular, but also on a personal level. People use peer-to-peer (P2P) apps such as Venmo on a daily now to send money to friends and family instantly. Digital payment options have found their way into everyday lives and are introducing a new digital age of payments. This is happening at a much faster pace than anyone could have predicted.
More businesses are offering digital payment – both online and offline
The widespread adoption of digital payment methods can be seen both in-store and online. Especially following the last year that saw businesses and consumers look for alternatives to physical money, technological alternatives are seeing an accelerated adoption in-store. Cards still make up most of the in-store payments, however, contactless payments have seen a massive surge as more customers get acquainted with and enjoy the benefits of paying with a simple tap. Alongside are mobile wallets such as Apple Pay and Google Pay, which have seen a rapid increase in usage as of late, allowing customers to use their smartphones to check out contactless. A rather new development are QR code payments, which have also been gaining traction due to their ease of use and cheap installation, as customers only have to scan a QR code at the counter to check out.
It is not just the in-store retail, however, that is changing, as the massive surge of e-commerce over the past year has led the majority of online businesses to adapt to the changing user behavior. Shops and service providers of all kinds have been introducing new ways of digital payments to offer their customers convenience, safety, and speed at checkout. For instance, at millions of online shops users can now use PayPal’s “buy now, pay later” option, Pay in 4, to check out without having to pay straight away.
Digital payment options are also transgressing the retail space, as providers from all sectors now offer e-wallet payments at checkout. For instance, Delta was one of the first US-based airlines to allow their customers to book flight tickets using Apple Pay in their app. You can also use PayPal for almost anything now, from booking a vacation on Expedia, to buying a game at the PlayStation Store or watching your favorite movie on Netflix. Even the sports betting sector has been adapting to the changes and has introduced modern methods of payment. The experts from SBO.net have curated a list of some of the best online sports betting sites available in the US, which offer a safe and enjoyable betting experience. The best ones also offer a wide variety of payment options, such as the e-wallets offered by PayPal or Neteller. This development clearly shows the ever-increasing importance of digital payment options.
Consumer behavior and needs are changing
With this ongoing widespread adoption of digital payments, consumer behavior and needs have been drastically changing, forcing businesses to jump on the bandwagon to keep their competitiveness. As more businesses from any given industry offer digital payment methods at checkout, consumers are increasingly used to the convenience and speed of such options. People use P2P apps to send money to their friends instantaneously and are now expecting such fast transactions at checkouts as well. This does not only apply to paying, but also to receiving payments, for instance for a refund. Rather than waiting for the money to be credited back onto their credit card, customers now expect to receive instant payments.
This development and change in consumer habits have businesses ramp up their game in the race to attract and retain customers. People now tend to have one preferred payment method, and should a business not offer it, many will shift to a competitor who does. Offering a selection of digital payment methods has therefore become a must-have for a modern business to keep their customers. By offering fast checkouts as well as immediate refunds to customers who return items, businesses can improve their customer experience and deliver service faster, while waiting times for funds to be sent and received are eliminated. Diversifying available payment options also allows customers to make a choice depending on their preference and convenience, improving their overall experience.
The digitization of payments has been moving forward at an accelerated pace, as consumers and businesses embrace the online world. Using digital wallets and contactless methods, among others, to pay in-store and online has been drastically changing the payment space as we know it. As consumers are getting more used to the speed and convenience of digital payment methods, businesses have been racing to adopt these technological alternatives. The changes to the payment industry we are seeing today, however, are most likely only the beginning of the future of payments.