Over the past couple of years, businesses have seen a shift in consumer behavior as shoppers continue to embrace new browsing methods, buying habits, and brand interaction. To help you stay ahead of the curve, here’s a look five trends in the payment industry that you should follow.
1. Consumers Are Ditching the Card
For the first time, card-not-present transactions climbed to the top of the list to become the most popular payment method in March 2020. Since then, Consumers have continued to ditch the card for alternative payment methods including online shopping, using a curbside pickup, or reaching for their mobile wallets.
Businesses impacted by trends in the payment industry should seek ways to adapt to changing consumer preferences by:
- Adding more local and national shipping options, which in turn, could grow your e-commerce following.
- Offering a buy online or in-store pickup option for brick-and-mortar stores.
- Introducing mobile payment terminals and touchless payment options (such as touch-to-pay) for their speed, security, and hygienic benefits.
2. Digital-First Is the New Standard
Research shows thirty-nine percent of consumers prefer online shopping. Therefore, you should consider implementing a digital shopping experience catering to consumers who may want to look up your store hours, browse your inventory, and familiarize themselves with your brand before stepping foot into your store. A digital-first approach takes research and resources to pull off, but it’s worth pursuing in order to grow your audience and ensure more satisfied customers.
Some important aspects to consider include:
- Modernizing your website to include store hours, services, and products online, even if you don’t sell online.
- Creating a frictionless digital purchasing experience for in-store shoppers with the help of interactive kiosks to check inventory, locate items, and get on the waitlist for back-ordered products.
- Implementing contactless payment options like Apple Pay and Google Pay for smartphone users.
- Using digital invoicing and QR-code-enabled payments for service-based businesses.
3. Offer Installment Payment Options
Retailers dealing with big-ticket sales, such as furniture stores, have long offered installment plan options to help shoppers get what they want now without forking over the money upfront. However, this option has gradually made its way into other industries, starting with PayPal’s “Bill Me Later” system. In addition, new competitors such as Klarna and Affirm are bringing it to the mainstream.
Consumers are quickly growing accustomed to seeing buy now and pay later options at checkout for clothing, electronic, and beauty purchases.
- Buy now, pay later (BNPL) represented just 9 percent of global e-commerce payments in 2021 but is expected to claim 24 percent of that market by 2026.
- About 65 percent of merchants are expected to add a BNPL option by the end of 2022.
- Offering BNPL is a selling point, and it’s something you can use throughout your pre-purchase, checkout, and post-purchase marketing.
4. Focus on Digitizing B2B Payments
While there’s a significant shift towards digital-first in the B2C world, it’s important to point out that the B2B sector continues to be largely paper-based. Naturally, this impacts efficiency, but it also poses complications for any organization looking to tap into the latest solutions like automation and business intelligence.
Adopting digital B2B payments will help your business improve productivity, get paid faster, support cybersecurity initiatives, and even nurture stronger vendor relationships thanks to easier payment processes.
- Look for ways to eliminate manual processes from the B2B payment flow by moving to digital invoicing and online payment options instead of paper checks.
- Implement online communication methods and opt for a new CRM tool instead of disjointed emails.
- Upgrade your old spreadsheet to a cloud-based accounting system for quicker payment processing.
5. Prioritize Privacy and Security to Keep Up With the Trends in the Payment Industry
As cyber-threats continue to grow more common and more sophisticated by the day, it’s in every business’s best interest to invest in a robust data security plan. However, it’s easier said than done.
One of the biggest trends in the payment industry this year is the increasingly strict regulations on how companies handle customer information. In addition, the advent of GDPR (General Data Protection Regulation) out of the European Union had a global impact, and you should prepare for similar regulations out of the U.S. and other major players soon.
To meet increasing data privacy and cybersecurity regulations and stay on top of the trends in the payment industry, all businesses should follow these best practices:
- Invest in the latest cloud-based software systems.
- Call upon an experienced cybersecurity consultant or agency to guide your organization’s process refinement.
- Adhere to GDPR and other data privacy regulations that impact your business, and work to future-proof your strategies as much as possible.
- Tap into business intelligence (BI) tools to ensure that you’re ethically making the most of the data and insights you’re working so hard to protect.
NMA is a merchant advocacy group dedicated to reducing or eliminating the unnecessary fees associated with accepting credit card payments. Since 2004, NMA’s payment processing solutions have delivered tailored solutions, best-in-class customer service, and high-quality service offerings for businesses across multiple industries. Whether it’s high-risk or low-risk, brick-and-mortar or e-commerce, NMA will create the best processing experience for your company. For more information, visit www.nationalmerchants.com or call (866) 509-7201.