Our latest payments industry news roundup covers the latest in new payment technology and payment fraud, the rise of alternative payments, and the recovery progress of SMBs.
Consumers want self-service checkout options but rarely get to use them
As customers return to brick-and-mortar stores, they increasingly want their in-store shopping experience to mimic the ease, speed, and convenience of their online shopping experience.
A new report from PYMNTS and Toshiba surveyed 2,665 US consumers about their retail experience and the impact of self-service options. The report shows that consumers have a high interest in self-service options like self-checkout; yet some merchants are missing opportunities to capitalize on this demand.
Among the report’s findings:
- Only one-third of consumers prefer traditional checkout lines over innovative alternatives.
- Over 80% of consumers want to try nontraditional checkout alternatives, such as self-service.
- 41% of consumers use traditional checkout lines because it is the only option available.
- 68% of self-service grocery shoppers choose self-service checkout because of its speed.
With more consumers shopping online, brick-and-mortar merchants will need to take into account customers’ changing expectations for in-store shopping.
Amazon to pilot 'Just Walk Out' tech at Whole Foods locations
Amazon plans to trial their “Just Walk Out” technology in 2022 at two Whole Foods locations - one in Washington, DC, and the other in Sherman Oaks, California. The technology detects and tracks the items that shoppers put in their cart.
The stores will have self-checkout lanes available for anyone to use. For those who want to shop using the “Just Walk Out” technology, they can do so in one of three ways:
- Scanning the QR code in the Whole Foods or Amazon app
- Waving their palm using Amazon One
- Inserting a credit or debit card linked to their Amazon account
The “Just Walk Out” technology is an example of invisible payments - see our related blog entry for more on this payment trend.
New pandenomics study: 76 percent of SMBs say local economies still on recovery road
The latest report in a PYMNTS series called “Pandenomics” (a combination of the words “pandemic” and “economics”) takes a look at how small and medium businesses (SMBs) with physical stores are progressing in their economic recovery from the pandemic.
While some gains have been made, 76% of surveyed SMBs say their local communities have yet to recover from the pandemic’s impact.
That said, there is some good news. SMBs that made the digital shift earlier (for example, pivoting to contactless payments) are seeing a stronger recovery. Among the study findings:
- The Main Street SMBs that invested in touchless payments were 49% more likely to have seen their revenues increase in 2020 than decrease.
- 44% of those that invested in touchless payments innovations said their 2020 revenues exceeded 2019 levels.
- 67% of Main Street merchants that adopted touchless payments and similar digital tools are confident about their 2021 revenues - meaning they are more than five times more likely to expect that their revenues will increase rather than decrease in 2021.
Learn more about touchless payment technology in our guide to contactless payments.
Buy now, pay later: the “new” payments trend generating $100 billion in sales
While alternative financing methods such as “buy now, pay later” (BNPL) have been around for a while, they’ve recently seen a large increase in usage in the United States.
A recent article in Forbes discussed new research from Cornerstone Advisors. This research noted the huge increase in usage, sharing that US consumers “will make nearly $100 billion in retail purchases using BNPL programs in 2021 - up from $24 billion in 2020, and $20 billion in 2019.”
When breaking down the demographic information, they also found that BNPL use has recently increased across all age ranges in the US.
- The percentage of Gen Z consumers in the US using BNPL has grown six-fold from 6% in 2019 to 36% in 2021.
- Millennials’ use of BNPL has more than doubled since 2019, from 17% to 41%.
- Gen X consumers’ adoption of BNPL more than tripled since 2019, from 9% to 30%.
- Even Baby Boomers are using BNPL more, with their use increasing from only 1% in 2019 to 18% in 2021.
Learn more about “buy now, pay later” in our blog about the benefits of alternative financing.
Merchants are unprepared for the rise of alternative payments: Sift's exclusive insights
While consumers are increasingly making use of alternative payments such as “buy now, pay later,” cryptocurrency, and more, new research shows that merchants might not be quite as prepared for these payment methods when it comes to preventing fraud.
Merchant Fraud Journal and Sift recently partnered to survey fraud prevention leaders at some of the world’s leading brands. One of the survey questions asked, “How effective are you at preventing ecommerce fraud from sources other than credit cards?”
Only 26% of leaders responded they were “very effective” at preventing fraud from sources other than credit cards, and just 60% said they were ‘mostly effective’ in preventing alternative payment fraud.
With the increase in consumers using alternative payment methods, merchants - as well as the independent software providers (ISVs) that offer them business management software - need to stay on top of payment industry trends and focus on security to prevent fraud.
To learn more, visit our blog entry about recognizing and managing payment fraud.
Conclusion
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