The global pandemic has forever changed how people think about paying for things. Prior to COVID-19, one might have argued that few thought about it at all. How we pay for goods and services is often a matter of habit, conditioning, and familiarity. As a result, a material change to payment behaviors often involves a long and reluctant journey, as consumer inertia, apathy, or apprehension toward incremental improvements slow the overall adoption trajectory. If the current process to pay meets the customer’s needs, and it feels safe, efficient, and familiar, there is little incentive to change.
COVID-19 has provided the impetus to overcome consumer inertia and has created an unprecedented global appetite for changes to how we pay. According to Visa’s Back Business study, 78% of global consumers have adjusted the way they pay for items in the wake of intensified safety concerns.
In a Gartner report from November 2020, it was revealed how the pandemic influenced payments. For example, in-store payments felt a 63% decrease in customers. In this time customers migrated towards online (46% increase).
Having these Gartner statistics in mind, what are the 5 payment trends you should really care about?
#1 Trend – Staying safe is still the most important
The coronavirus has changed the way companies accept payments. No one actually wants to be in contact with cash money or hand over a piece of plastic, and many employees are still working from home, making the opening of mail and the filing of checks inefficient.
Besides that, every industry was forced to move towards more cashless payments. According to the National Retail Federation, 67% of US retailers now accept some non-touch payment. In Europe, Visa reports that 75 percent of in-store payments are now contactless. Many B2B and B2C organizations digitize invoices and payments and reap benefits – customer satisfaction, efficient processes, and simplified procedures.
#2 Trend – Biometric authentication
Biometric authentication is a trend that will quickly emerge in the year 2021. It is a method of verification that involves the biological and structural characteristics of a person. These verification methods include fingerprint scanners, facial recognition, iris recognition, heartbeat analysis, and venous mapping.
As the problems of identity theft and fraud rise, biometric authentication can become a reliable and secure option for all digital payments made in 2021. Even the states are suggesting the same thing. As per Biometric Update.com, 2.5 million (approximately) payment cards will be issued in 2021.
#3 Gen Z: The tech-savvy generation
Before we proceed, let’s understand what generation Z is. The term ‘Generation Z’ or the ‘Gen Z’ is used for individuals that are born between the years 1999-2012. In simple words, all those who are aged 7-20 are the Gen Z which also happens to be the generation of the digital world.
According to Forbes, Gen Z will make up 31% (approx.) of the global population in 2021. This shift in the population will have huge significance. It’s because this shift indicates that the majority of the world’s population by 2021 will be a tech-savvy or tech-exposed generation.
This generation will have a higher dependency on state-of-the-art, automated, faster, and more efficient technologies and services. As a result, demand for digital payment systems will increase in the coming year.
Are you searching for a ready-to-use and easy-to-customize financial app?
We developed Shared Pockets, an app that has the look & feel of what Gen Z wants while helping them be more aware of how much they spend.
#4 Banks continue to outsource in the race for customers
The main driver for this trend is that corporate customers expect offerings from banks that can break the silos between various platforms; for example accounts payable, accounts receivable, procurement, or treasury management.
At the same time, B2B clients are becoming more and more interested in purchase process transparency with visibility into all aspects of the transaction and post-transaction process.
According to a study from Capgemini, customers are expecting more from banks and they want customized solutions like having a single payment platform, to perform payments to their vendors, suppliers, clients, and employees.
We developed the right solution to integrate with your services for B2B clients
We developed Invoicer – an invoice management software for faster and error-free financial transactions & tracking. Invoicer is a complex but intuitive financial system that simplifies and automates the invoice management process at multiple levels, and all the financial activities related to it.
#5 QR Codes will be the new norm
A study by Juniper Research found that global transaction volume worldwide from digital commerce will exceed 1.1 trillion by 2024, up from 641 billion in 2019. This is one of the effects of the pandemic that will forever change our way of life.
Emerging markets, rather than developed markets, will be the main driver behind increased digital trade. It also found that markets beyond North America and West Europe will account for 77% of the total amounts of online trade transactions in 2024, driven by QR code payment system rollouts and cash shifts in emerging economies.
New research has shown that QR code payments will be the most widely used digital trade mechanism over the next 5 years, accounting for 27% of all digital trade transactions in 2024.
Digital payments are the future. In the coming years, we will see payment methods moving from physical cash to digital payment methods. Before the transition comes to an end, many new trends will appear and disappear.
What is surely going to happen is that – customers, both B2B and B2C, will expect financial entities to help them be more agile, while using a personalized software solution.
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