The most spoken about change has been the push away from cash usage to card payments over this period. At the same time, customers are also looking for ‘cleaner’ ways to make payments which avoids touching in foreign devices where possible.
This has increased contactless payments by 20% according to MasterCard, with now 85% of face-to-face payments being contactless payments. 20% of those are coming from a mobile device.
E-commerce payments have at the same time exploded with consumers spending 30% more online within the first 6 months of the pandemic. The higher online spending levels have continued and don’t expect to drop. Customers however are still concerned about their card details online and the security around e-commerce transactions.
Technologies that are emerging to assist with e-commerce payments are the one-click payments or tokenisation. This technology saves the data a user enters on a checkout page making the first purchase. During all further purchases in the same store, the payment data is filled in automatically.
In retails stores, growth amongst both Apple Pay and Google Pay clearly show where customers are heading towards. Today, the total volume of contactless payments is $2 trillion. Juniper Research predicts this figure will reach $6 trillion by 2024. The key about this payment acceptance is speed, convenience and safety. If your physical credit card gets stolen, fraudsters have all the data to make purchases (if you don’t have additional protection).
Other significant technologies emerging and slowly filtering into the payment world are AI/Machine Learning, Blockchain, and Cryptocurrency. 5G combined with IoT will certainly also play a major role in how the payments world transforms over the coming years. Access to data, deriving the best insights and offering customers the choice they want will win you the game.
There is still a way to go before these new technologies come into play – regulations, compliance and central bank support is needed. Interestingly, according to MasterCard, 86% of global central banks are exploring digital currencies with 16% already in the test phase.
Again, there are clear signs of where the payment world is heading. Digital currencies will at some point need to be offered as a mainstream payment acceptance option.
Payment technology providers need to stay ahead of the game and provide customers their choice of payment. With this they need to ensure the safety of their customers and importantly enable all merchants to be financially included into the payment ecosystem.
Many merchants remain left out of the digital payment world and as digitisation continues to grow so must our awareness to include the vulnerable at the right price points.
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