As we begin a new year, we thought it would be useful to spotlight how 2020 changed the payment industry and share relevant industry thought leadership around payment trends to spot in 2021.
Covid-19 Effects on the Payments Ecosystem
ATM Marketplace shared some interesting statistics and findings around digital payments during the pandemic.
Legacy payment options (such as cash) made up for one-third of US consumer payments’ total value. However, for individuals who preferred these traditional payment methods, moving to digital payments was a forced-adoption effect due to social distancing and quarantine.
However, ATM Marketplace reports that 80% of consumers who relied on cash and checks in the past plan to continue using digital payment tools post-pandemic. Interestingly enough, those who primarily wrote checks adopt mobile payments the quickest: only 13% of check users will stop using digital payments post-pandemic, versus 20% of card users.
While there’s no doubt digital payments have taken off, this preliminary data shows that there continues to be a minority of individuals who are willing to return to traditional payment options once it’s safe to do so. Merchants and businesses should continue to be flexible in their payment options and think twice before taking away an option that could be preferred by certain customers.
Payments Predictions Business Insider Got Wrong
Sometimes, the crystal ball doesn’t give the right forecast. Business Insider revisited their 2020 payment predictions and admitted they were wrong about contactless payments.
Initially, they “projected that contactless payments would fail to go mainstream in the US in 2020—but the coronavirus pandemic offered the unforeseen boost the technology needed to take off.”
Historically, contactless payment adoption rates in the US were low compared to other first world countries. According to Forbes, only 3% of cards in the US were contactless in 2018, and in 2019, mobile contactless payments accounted for less than 2% of US retail sales. Based on these statistics, it’s understandable why some remained bearish on contactless payments going into 2020.
Amazing what a difference one year makes!
Cashless Will Remain King Throughout 2021
Mobile Payments Today highlighted the benefits of digital payments, noting that it has helped businesses retain customers as they transition to online formats or eCommerce channels.
Digital payments also help business owners pay their employees, suppliers, and other service providers safely, while cutting costs and reducing administrative tasks. They predict that due to the convenience, engagement, and flexibility that digital payments provide, this cashless trend will remain as life goes back to normal.
At Global Payments Integrated, we are excited to be at the forefront of this shift to digital. If you are a software developer or executive looking to add digital payment functionality into your product, learn about our contactless solutions or contact us directly for more information.
Digital Loyalty Will be a Focus for Restaurants
PYMNTS reported that restaurants should respond to changing consumer preferences on how they want to be served during the pandemic by improving their loyalty programs. Restaurants can see growth rates as high as 29% by creating a loyalty program that sticks.
A successful loyalty program relies on consistent customer experiences for their drive-thru, takeout, and delivery. Apps should also be convenient and offer a frictionless digital experience. By nailing these factors, restaurants can improve customer sentiment, order size, and frequency of visits.
Quick service restaurants, fast-casual chains, and fine dining establishments can benefit from offering touchless payment options that appeal to customers and place safety as their top priority.
Flexible Payments are Shaping the Future of Commerce
Lightspeed shared retail trends they believe will shape 2021, and payments had a lengthy mention. They mentioned how retailers could easily accept contactless and mobile payments anywhere (in-store or curbside) with a simple tap, swipe, or insert.
They also discussed the convenience of digital wallets and how they can further enhance the in-store experience by reducing contact and keeping sensitive data safe from credit card scammers.
Global Payments Integrated promotes modern payment processing by offering updated credit card terminals and readers that support digital payment methods. Learn more about our readers and terminals.
We hope you enjoyed this payment news roundup!