Rethinking Payments in the New Digital EconomySep 03, 2019
Years ago, when you wanted to buy something, you’d either pay by cash or check. Then credit cards were added to the mix, and grew in popularity to the point that many Americans no longer carry cash at all—and the bulk of those that do don’t carry much.
With new services like Apple Pay and Google Pay emerging in recent years, it appears as though we’re in the middle of another transformation in the world of payments. While no one can predict the future, it’s very apparent that—in the age of mobile ubiquity, convenience, and the demand for personalization—payments are changing once again. In order to remain relevant, and retain their customers by meeting expectations and offering exemplary experiences, merchants need to adapt and be prepared to accept newer payment forms.
With that in mind, let’s take a look at five ways merchants need to rethink payments in the new digital economy.
1. Payments need to be convenient
Everyone knows how frustrating it can be to wait in a long line only to find out the hard way that a preferred payment method is not accepted. Sorry, we don’t take American Express. In an age in which customers are increasingly demanding personalized experiences, merchants need to be able to accept as many payment methods as possible. Not only does this provide convenience to customers, it also saves cashiers time by eliminating the Do you take this? question from the equation.
In addition to convenience, merchants that can take multiple kinds of payment are able to sell to more customers. They don’t have to turn anyone away.
2. Payments need to meet customer demand for instant gratification
A recent report from J.P. Morgan points out that today, the point of sale is no longer just a cash register on the counter. The rise of the new digital economy means that everything from smartphones to embedded devices can serve as a POS system to an extent—giving customers more and more options for how they pay. As customers get used to being able to pay for things however they prefer with one merchant, they’ll grow to expect this instant gratification from every merchant. As such, merchants need to invest in payment processing solutions that help them deliver on these expectations. Otherwise, customers will shop at other stores that offer the best payment experiences instead.
3. Merchants need to be able to collect digital payments
While digital payments are still relatively new, industry thought leaders believe that the entire digital payment ecosystem can grow into a $100 trillion industry. What’s more, the market for NFC payments—which are made through services like Apple Pay, Google Pay, and Samsung Pay—is expected to reach $47.43 billion by 2024, as more and more customers get comfortable with the idea of buying things on their phones. It remains to be seen which kinds of payment mediums will emerge in the future, but it’s only a matter of time before the next form of payment starts gaining steam.
Add it all up, and merchants would be wise to invest in the latest payment solutions that enable them to future-proof their operations via underlying operating systems that receive regular software updates.
4. Payments play an increasingly important role in the customer experience
For many merchants, payments take center stage in the customer experience—which is becoming a key differentiator in today’s fast-paced world. Digital payment options improve the customer experience, and set merchants apart from their competitors by offering the latest in payment technology, creating an in-store experience that customers have grown to expect in recent years. In other words, being able to accept new digital payment forms delights customers—which in turn increases the chances that they will become loyal. And that’s a big deal, because loyal customers can be responsible for up to 70 percent of a merchant’s sales.
5. In the digital world, payments help merchants collect the data they need to delight your customers
In the world of digital payments, each transaction represents a single data point that merchants can analyze to detect trends, personalize offerings, create loyalty programs, and learn how to sell more effectively to their customers. With the right POS system in place, merchants can generate useful data with each digital transaction, using that data to continuously refine their offerings and deliver on customer expectations—all of which can’t be done at a run-of-the-mill cash register.
Is It Time to Overhaul Your Payment System and Adapt to the Digital Economy?
In an era characterized by rapid change, merchants simply can’t expect to use the same approach they’ve been relying on forever and still get the results they’re hoping for. For example, as NFC growth continues, merchants need to be able to collect these payments. Otherwise, they will have to turn an increasing amount of customers away as time goes on.
Beyond that, merchants need to start thinking about what the future looks like—and what they can do today to start preparing for it. The good news is that by moving to a smart payment terminal and the latest POS system, merchants get the peace of mind that comes with knowing they can accept more and more payment mediums, through technology that adapts to meet the needs of the new digital economy.