This week’s payment news roundup covers the expansion of BNPL from online to in stores, the rise in subscription ecommerce, the latest in consumer spending, and a new type of payment fraud to watch out for.
Merchants, take note: consumers want more in-store BNPL options
Buy now, pay later (BNPL) has taken off over the past year. However (due partially to the pandemic), it has mostly been used for online purchases. This is now changing, as Pymnts.com notes that consumers are increasingly wanting to have access to BNPL for in-store purchases as well.
Pymnts.com conducted a survey of over 2,000 US consumers for information on their use of BNPL. Interestingly, they found:
- Nearly 10% of luxury and specialty store consumers who made recent purchases online used BNPL during their most recent transactions, while just 1.8% of in-store consumers used it.
- 46% of department store customers say they would switch to another retailer that offered BNPL as a payment option.
These statistics show the importance of offering BNPL functionality, both online and in-store. For more on the recent rise of BNPL, check out our infographic.
Special perks and social media connections boost subscriber loyalty, build community
Subscription ecommerce is another trend that saw a rise during the pandemic. Pymnts.com shares that “the global subscription and billing management market is projected to reach $7.43 billion by 2027, according to one report — up from $3.97 billion in 2020.”
However, some consumers are starting to suffer from “subscription fatigue,” with 60% noting that navigating between different streaming subscription services is a frustrating experience. Pymnts.com notes that while a personalized experience has always been important in subscription commerce, it’s now becoming a vital part of avoiding the loss of consumers to subscription fatigue.
For more on subscription billing, also referred to as recurring billing, take a look at our Guide to recurring billing.
Consumer spending withstands omicron, inflation: Visa, Mastercard
This month, Payments Dive shared reports from Mastercard and Visa that found consumer spending has strengthened in spite of challenges such as increasing inflation and the ongoing pandemic.
Mastercard’s report noted that January US retail sales increased 7.2% over last year, and online sales increased by 10.4% from January 2021. Categories that saw growth included apparel, appliances, and electronics.
Ecommerce sales increased 110.1% compared to pre-pandemic levels, showing that many people who took to online shopping during the pandemic have continued - and expanded - their use of this shopping method.
Four trends influencing financial services transformation in 2022 and beyond
One of the biggest discussion topics in the payment industry over the last two years has been the “digital shift” brought on by the pandemic. With the pandemic causing customers to want to limit contact when shopping and paying, retailers and other businesses had to quickly pivot to contactless payment methods and other digital transformations.
PaymentsJournal noted that more than 90% of financial service providers doubled the pace of their digital transformation during 2020. This proved financially helpful to businesses as well - in 2020, companies that accelerated their digital transformation rate by five times “saw year-on-year profits up by 4.6 percentage points.”
The article notes that the digital transformation is here to stay and companies need to adapt accordingly.
QR code transactions are on the rise, but now so are concerns about QR code fraud
As part of the digital shift, the United States saw a resurgence in the use of QR codes for activities such as payment and self check-in. But as with any new technology, cybercriminals almost immediately began to find ways to exploit it.
Digital Transactions shared the news that criminals are creating fake QR codes, that when scanned by consumers, lead to a fake landing page where their personal and payment information is collected. The scammers are putting these QR codes over top of legitimate ones that consumers would scan with their mobile device to make a payment, like at a restaurant or on parking meters.
Another QR code scam occurs when consumers scan a fake QR code and criminals then download malware to the person’s mobile phone. This malware then allows the scammers to access financial data and other personal information from the phone.
In fact, fraudulent QR codes have become so prevalent that the FBI recently issued an alert to warn consumers to look out for these fake codes. Ways that merchants can help to prevent QR code fraud include testing and auditing their existing codes to make sure they haven’t been tampered with, and training their staff to spot fake QR codes.
To learn about ways that legitimate businesses have begun using QR codes in recent years, visit our blog post on the subject.
Whether you’re interested in the latest in payment technology or just want to stay up to date on the latest payment trends, we can help. For the latest payments industry news, make sure to subscribe to our blog.