The payment news we focus on this week discusses the shift to digital and invisible payments, the true impact of card declines on subscription businesses, and cryptocurrency payments at checkout.
Gen Z’s use of cards and cash is declining rapidly
Insider Intelligence and eMarketer did some research to find out just how fond Gen Z is of digital payments. Unsurprisingly, only 4 in 10 (37%) Gen Zers used cash to pay in person in 2021, and only 22% said they would do so in the future.
Considering Gen Z are digital natives who have never known life before the internet, it makes sense that they are less likely to reach for a physical card or cash to make a purchase. More than 6 in 10 Gen Zers said mobile devices were their most popular method for digital purchases, and they conduct the majority of their banking and financial business online. They are also expecting to do banking, investing, and payments all on mobile in the future.
As Gen Z’s purchasing power increases, ISVs need to get serious about expanding their payment methods to include digital wallets and mobile payments such as text to pay.
Cards and digital payments will co-exist for now
PYMNTS reports that while consumers continue to use cards at physical checkouts, trends are showing that digital alternatives are gaining traction. IDEMIA executive Matthew Cole tells PYMNTS that the credentials in our wallets are slowly becoming digitized, and there will be a point in time where we will no longer need to carry a wallet anymore.
However, until most retail stores implement the infrastructure needed to make digital payments the norm, cards and digital wallets will continue to co-exist. In the meantime, enterprise businesses can consider implementing contactless payments, an option that is a bridge between the physical and digital.
Subscription business churn attributed to failed payments
A PYMNTS research report noted that payment declines prompted 27% of subscribers to cancel their accounts or switch to a competitor. Additionally, 38% of consumers who experience card declines question whether they should continue the subscription.
What is the best way to manage card declines? The article suggests that companies should avoid getting the customer involved. Instead, they should start by getting reliable metrics on false declines and how they affect business. Next, they should leverage technology solutions that can resolve payment authorization issues.
Outdated card information is one reason behind card declines. ISVs can work with Global Payments Integrated to include automated card updating services to help reduce declines for their subscription business customers.
Juniper Research predicts in-car payments will rise
Digital Transactions shared the findings of a report by Juniper Research that suggests the ability to make payments from a car dashboard will increase from 87 million in 2021 to 4.7 billion in 2026. The increasing availability of linkable gas pumps and electric-vehicle charging stations, in addition to technological advances such as in-vehicle payments solutions, may drive adoption in the next few years.
While fuel payments are currently the primary use case for in-car payments, Juniper Research urges payments companies to develop the technology to apply to restaurant to-go orders. Additionally, they mention how important voice recognition and in-dash authentication technology will be in making growth happen.
Understand connected cars better by visiting our recent blog about the trend of invisible payments.
Crypto acceptance coming to a check-out near you
Payments Dive reports that mainstream payment providers and card networks are coming up with new products and services that encourage consumers to pay with crypto at the point of sale.
With crypto’s value at more than $2 trillion worldwide and a growing number of consumers holding it, businesses are reacting to increased acceptance by adding cryptocurrencies as a payment option.
However, there is some uncertainty whether consumers will opt-in and make it their default payment method right away. Some experts are unclear about the benefits of paying with crypto versus traditional payment options, not to mention the tax implications that the consumer may have to address when spending crypto.
Still, those who are implementing cryptocurrency payments are betting on the future. Businesses want to stay on top of the new payment habits of the younger generation, who are more likely to transact with crypto and are looking for interoperability between their crypto and non-crypto assets.
We hope you find this roundup helpful in staying ahead of the latest payment trends! Keep informed on the payment industry by subscribing to our email newsletter or following us on social media.