The Future of Payment: 6 Trends That Will Change How We PayAug 29, 2019
Companies are increasingly putting the customer experience first, which is a wise move given that it’s easier than ever for customers to switch brands. One way merchants are working to improve the customer experience is by expanding their payments process to make it as easy as possible for customers to pay for things using their method of choice.
Payments have changed remarkably in recent years. It wasn’t long ago when payments were at the forefront of every transaction. You’d give a cashier $20 on a $13.77 bill and wait for them to give you $6.23 in change before the next customer could be rung up. As technology evolves, however, payments are increasingly becoming hidden and frictionless on the back end. Consider how easy is it to buy something with just one click on Amazon. The lower the friction for the customer, the greater the customer loyalty—and potential revenue.
The evolution of payments continues to accelerate. With that in mind, here are six payment trends that promise to change the way customers pay.
On Singles’ Day last year, China’s e-commerce juggernaut Alibaba generated $30.8 billion in sales. Of those sales, 60.3 percent of customers settled their transactions by either taking a selfie or using their fingerprints. Over in the United States, companies including Amazon and Mastercard are experimenting with using biometrics as a payment mechanism. We expect more and more biometrics-based payment solutions to emerge in the near future as technology evolves and consumers get more comfortable using biometrics to buy things.
2. Contactless transactions
Recently, Amazon made headlines with the announcement of Amazon Go, a chain of cashierless convenience stores that aims to disrupt the way retailers operate. At these stores, customers can grab items off shelves, put them in a basket or bag, and walk out of the store without submitting any payments. Amazon charges these shoppers by using image recognition software and artificial intelligence to automatically “ring customers up” while eliminating the checkout line altogether. Coupled with the advent of NFC payment forms like contactless credit cards and services like Apple Pay, Samsung Pay, and Google Pay, it’s getting easier to imagine a future in which most transactions are contactless.
3. Rewards programs
Rewards programs have taken center stage in recent years. For example, of the Americans who have credit cards, the average person has 3.7 different cards. For example, someone might pay for groceries with a card that offers 6 percent cash back, pay a restaurant bill with a different card that offers 4 percent back, and buy things on Amazon with yet another card that offers 5 percent back. Because rewards programs encourage customers to stay loyal to one brand, smart retailers will increasingly institute loyalty programs. Many of them will use apps designed specifically to create and manage these programs directly from their payment terminal.
4. Generation Z
Generation Z—loosely defined as those born between the mid-1990s and the mid-2000s—is growing in their purchasing power. By 2020, Accenture expects that these younger shoppers—all of whom were reared on modern technology—will account for 40 percent of consumers. Simply put, this group doesn’t remember a pre-Google world, so they will likely be comfortable using any modern payment solution. Retailers need to prepare for their purchasing power to rise today so that they can sell to this younger segment tomorrow.
5. Payments everywhere
Accenture also expects the “payments everywhere” movement to continue to gain steam. Thanks to modern mobile payment solutions that connect to the internet via 3G and Wi-Fi, merchants can operate anywhere while accepting all kinds of payments—even NFC payments and chip cards. As customers become more and more comfortable with mobile payments, merchants will increasingly be on the go when selling their wares.
6. Modern payment solutions
Historically, transactions have taken several days to settle. In today’s always-on culture, this is far too long. To this end, banks and payment processing companies are investing in new payment infrastructure that enables them to accelerate payments. Similarly, retailers and merchants are overhauling their payment systems with modern solutions that are open, extensible, and agile. Not only do these systems improve the customer experience, but they also help retailers operate more efficiently while increasing profitability.
Is your retail business ready for the future?
Today’s leading merchants have already moved to modern payment systems that help them meet customer expectations and future-proof their operations with solutions that receive software updates to stay on the cutting edge of technology.
The Poynt Smart Terminal is one such solution, enabling merchants like you to accept all kinds of payments from all kinds of locations. Because the underlying operating system receives automatic updates, you’ll get the peace of mind that comes with knowing you are always able to offer your customers the latest technology—thereby meeting their expectations. Beyond that, the Poynt Smart Terminal integrates with popular POS systems and can be extended via a robust marketplace filled with apps designed to help businesses like yours operate more efficiently.
Check out this video to see Poynt in action and learn how moving to a modern payment terminal and POS system can help your retail business get to the next level.