The financial services industry has gone through significant changes even before COVID-19, evidenced by the increasing use of QR codes, texting, and tapping mobile phones to make payments. The pandemic accelerated this growth and now more than ever, we’re seeing consumers shifting to become cashless.
The industry is also evolving rapidly. What’s used and implemented today may be different in the near future. But one thing is certain: Consumers and businesses alike want easy, fast, and secure payment options to improve their respective experiences.
Consumer habits are changing. The future of payment processing is evolving. In this blog, we explore the trends you need to know of.
Changes in Shopping Habits
Nowadays, shopping habits are all about convenience and speed. That’s why as business owners or marketers, you must understand that the way consumers shop is rapidly changing. Let’s take a look at some trends you need to consider.
1. Online Shopping is Here to Stay
According to statistics, 75% of people shop online at least once a month. In the US alone, it’s expected that there will be about 300 million online shoppers in 2023. This means businesses must make it accessible and easy for people to shop and remain relevant.
A fully-optimized website that ranks for relevant searches is essential to providing quality online service.
To take this a step further, brands also need to focus on offering personalized customer experiences and exclusive shopping processes, to make each buyer feel valued. This can be done through abandoned cart messaging, follow-up messages, and personalized product recommendations.
2. In-Store Experiences Still Matter
In-store experiences are still important to many consumers. In fact, 62% of shoppers said they like having the ability to try on, touch, and see products before making a purchase. Other shoppers note that they like confirming the quality of the products and having in-store support from store associates.
For brick-and-mortar stores, it’s crucial to provide a stress-free shopping experience. Retailers need to rethink store layouts and creative merchandising tools to highlight products while creating a feeling of openness.
Having a fast, reliable, and secure POS system also ensures smooth in-store transactions. Countertop terminals and portable payment solutions will make the payment process a breeze at your retail business.
3. Mobile-First and Voice Search Approach
With the continuous popularity of smartphones and mobile devices comes the growth of mobile commerce. This year so far, global smartphone users have increased to 6.6 billion, marking a 4.9% annual increase.
This means businesses should give focus on going mobile-first. This can range from making websites mobile-friendly so customers can shop while on the go, to developing apps and online stores to offer convenient, fast, and interactive shopping experiences.
Similarly, voice search is becoming more popular for several reasons. Studies show that 61% of people find voice search to be useful when hands or vision are occupied, 30% said it’s beneficial to get faster results, and 24% find it a time-saver when using certain devices that are too difficult to type on.
As voice search influences consumer experience, search results, and shopping decisions, businesses should monitor voice search developments to improve their approach for future business.
Changes in Payment Habits
1. Mobile Wallets
Mobile wallets have transformed the world and the trend isn’t slowing down anytime soon. One study reports that 35% of consumers added their bank cards and reward cards to mobile wallets. Also, mobile payment adoption is expected to reach 4.8 billion by 2025.
Why is this so?
Mobile wallet apps — such as Apple Pay, Google Pay, Samsung Pay, and PayPal — use encryption to protect the information stored in them. This means they offer more security to customers and merchants. They are a more accessible payment method, allowing people to shop, store and transfer funds, and even earn digitally. Mobile wallets also offer quicker, hassle-free transactions.
2. NFC Contactless Payments
There is also a growing reliance on near-field communication (NFC) technology. In 2020 alone, more than 60% of shoppers used contactless cards, with over 40% of them being first-timers.
Biometric technology enables users to make payments with just their fingerprint stored in their cards, making it a unique and secure transaction. Stores with such POS solutions are ahead of their game, offering a quicker and more diverse payment option for customers.
Another important factor to consider in the future of payment processing is cryptocurrency, such as Bitcoin.
Sooner than later, more businesses will start accepting cryptocurrency as a payment method. With Bitcoin going mainstream and major financial institutions approving it, it has become a legitimate virtual currency that offers secure transactions. In addition, the highly reliable verification process of this payment makes it less traceable and a lot safer.
4. Multiple Payment Gateways
Customers will want their checkout process to be as convenient, fast, and easy as possible. They want to locate their preferred payment method immediately. Otherwise, they will abandon the shopping cart or leave your store.
Business owners need to ensure that they provide a range of payment methods to cater to different consumers’ preferences. From card payments and mobile wallets to online platforms and perks or rewards, giving the customers the freedom to choose their way of paying will drive better engagement and loyalty.
The Concerns With Online Payment Processing
While the future of payment processing looks bright, some are still concerned with some challenges and issues that are linked to using these solutions. These include:
- Chargebacks: 81% of customers say they file chargebacks — demanding a refund after making a purchase — due to delayed or undelivered orders. When unresolved, chargebacks can lower the store’s rating, raise a red flag in payment gateways, and even terminate the business.
- Online fraud and data theft: Estimates tell us that every year, data from as many as 60 million credit cards are released via breaches. Hackers and scammers may gain access to sensitive card data and use it against the card owner. As a merchant, you are responsible for using online security tools to safeguard your business and for making your store PCI-compliant.
- Multi-currency payment methods: Multi-currency support isn’t always easy. Store owners may encounter issues from currency exchange and disparate payment technology regulations to federal laws and security standards.
- Payment fraud: Often, these are fake orders that hackers or scammers place at your store to find loopholes to breach your store’s security. To curb this, it’s crucial to have a plugin or tool on your website that detects fraud as soon as it occurs.
The Bottom Line
The future of payment processing will continue to evolve. However, at the end of the day, it all boils down to providing better, easier, faster, and smoother consumer experiences. As business owners, managers, or marketers, it’s vital to remain up-to-date on the trends of payment processing to ensure you provide the best possible solution for your customers. Doing this will drive your business growth and grow your loyal following.
Ready to step into the future of payment processing for your business? Start with a solid POS system. Get a free quote from True POS today!