COVID-19 has changed the payments space like never before. The disruption has put many out of business, but it has created an opportunity for merchants to reevaluate their business models and modes of payment. Consumers have become more health- and safety-conscious and as a result, their confidence in traditional in-store shopping has been shaken. As a business owner, you need to stay aware of the payment trends in the industry.
Technology is evolving. Business processes are changing. Here’s what you need to be aware of right now.
5 Payment Trends In 2021
1. A Change in Consumer Spending Habits
One immediate effect of the lockdowns and job losses was that people have had a lot less money to spend than in previous years. A look at 2020 Black Friday numbers underlines this trend: Store traffic was down a whopping 50% from 2019.
However, it’s not all gloom and doom. Some numbers were very encouraging for the payments industry. According to the McKinsey Payments Report, one of the more noted payment trends is that there will be a $48 trillion shift from cash to cards in the next decade.
Something else business owners can look forward to? There will be a boost in spending due to government stimulus, mainly the $1.9 trillion pandemic relief.
2. The Growth of E-Commerce
The same Black Friday numbers noted significant growth in e-commerce. Online shopping numbers were up 22%. And the growth will only accelerate. It’s therefore imperative that you take your business online.
E-commerce payment platforms increase the efficiency of your business and provide extra services, like analytics and in-depth reporting. It’s not surprising that this is a rising payment trend of 2021, and businesses need to adapt.
3. Growth in Contactless Payment Systems
In 2020, 64% of shoppers used contactless cards, 41% of them for the first time. This payment trend is going to be even more pronounced in 2021.
And it’s getting incredibly savvy. For example, biometric fingerprint technology allows the user to make touchless payments via a fingerprint stored on a credit card that is safe, secure, and unique to that individual.
While such cards haven’t really become mainstream yet, other POS solutions that reduce contact do exist. These not only make it safer for people to shop with your business, but it gives them one more option for how they pay.
4. Growth in Mobile-Based Payments
The transition from cash to cashless also means that there’s been tremendous growth in mobile wallets. According to one study, 35% of consumers added their cards to mobile wallets. 27% of people in the study experimented with QR code payments.
This was unthinkable a year ago but is now a blossoming payment trend.
5. Big Tech in Payments
In 2019, one of the biggest storylines was big tech’s move into fintech. Among those eager to make inroads into the business are Big Tech firms. Amazon Pay, Google Pay, Apple Pay, and Facebook Pay have all launched to varying levels of success as tech powerhouses seek to build new revenue streams.
How big of an impact they make on the payments space remains to be seen. But these players have the financial muscle to pull it off.
Estimates show that credit cards will transact $1.82 trillion in volume by 2024. These are direct sales for any business in the United States.
This industry is ever-evolving, and that’s not going to slow down anytime soon. We all need to be flexible and ready to adapt, because that’s the only way business can continue to flourish.
Your business should not be left behind. Are you keeping up with the latest payment trends? True POS can help. Get started by requesting your free quote here.