Payment processing trends are constantly changing, and small business owners need to stay on top of the latest innovations. These changes affect your everyday operations, as well as your relationship with customers and vendors.
If you are planning to start or continue your business in 2021. In that case, it’s essential to understand these payment processing trends to properly align your strategy with what’s going on in the industry and how it will change in the future.
As per the latest report, The global digital payment market size was 58.30 billion dollars in 2020. And, it is expected to increase at a compound annual growth rate (CAGR) of 19.4% from 2021 to 2028.
So, today in this blog, I will take you through the top 5 payment processing trends that you need to keep in mind if you want to succeed with your business’s payment processing strategy over the next few years.
Let’s begin the tour…
The first question must be in your mind that ‘how suddenly the payments processing trends are drastically changing? The reason is well known, i.e., coronavirus pandemic.
Since customers nowadays prefer to make cashless payments, businesses have shifted their gear to opt for various digital payment methods, including eWallets, mobile payments, P2P transactions, and more.
Now let’s discuss the various reasons why cash payments are slowly fading away, and frictionless payments are favored.
Highlights of Contents
Cash Payments Are Slowly Fading Away
The old standard of physical cash is becoming less prevalent in the digital age due to a decline in consumer behavior. Covid-19 has dramatically remodeled the world and affected payment processing too.
People are relying more on non-cash payments because of this pandemic, and its effects continue involving several fields around us like food deliveries or electronic commerce transactions.
This fact makes cash an unfavorable form when it comes to making purchases. It has led many companies to transition from traditional retailing systems towards online stores where they can directly accept credit cards through mobile apps that use specific technologies such as NFC and EVM.
Frictionless Payments Are Favored
Frictionless payments play an increasingly important role in customer service today. Customers are willing to pay more for a business with streamlined payment processing, so companies must prioritize this advantage when competing against similar products and services.
They need frictionless payments if they want to thrive in the current market.
Now you must know why payments processing is a new buzz in the business sector and how it could help you increase your revenue growth by going through the payment processing industry trends.
So, let’s understand the top 5 payments processing trends that would increase your customer base and retention rate.
Top 5 Payment Processing Trends for Your Business in 2021
1. Mobile Payments, eWallets, Loyalty Apps
With the rise of mobile payments, eWallets, and loyalty apps have become more popular over the past few years. Businesses can now reach customers without intermediaries directly.
And it is beneficial for both consumers and companies since it removes many barriers that would have delayed transactions or hindered business processes.
- Mobile Payments
Mobile payment methods, such as Google Pay, Samsung Pay, and Apple Pay, make up a significant percentage of all payments. These contactless methods have become particularly popular in today’s society because people want to minimize their interactions with businesses as they’re worried about pandemic risks.
- eWallets
Apple Pay, PayPal, and other eWallets are increasingly popular because of their time-saving convenience. Brands that support these apps will see a surge in sales as customers flock to an easier way to pay at checkout.
- Loyalty Apps
Loyalty apps are beneficial for businesses because it incentivizes and rewards customers by providing discounts, sales, points, etc., in exchange for making purchases regularly. Thus, it will see rapid growth in returns from loyal buyers.
2. Business to Business (B2B) Payment System
While B2B companies need to keep up with modern payment processing trends, small businesses also look for easier and faster digital transactions.
Businesses should implement digital payment methods to attract new customers. Since more and more customers turn to online transactions over cash or credit cards, They need to follow suit to remain relevant among their target market.
Hence, providing greater clarity into your business-to-business payment processing will attract new clients.
3. Buy Now, Pay Later
More and more consumers are looking for several alternative payment options, such as Afterpay and Klarna. Younger generations would be especially interested in these services because they can buy now with delayed payments or no up-front fees.
The “buy now, pay later” payment method is beneficial for businesses that sell expensive items. AfterPay or Sezzle integration into your business’ payment options can encourage higher sales and increase inventory without discounting products.
4. EMV and NFC
Mobile payment methods are becoming more popular, but most people still use debit or credit cards. However, even these old-fashioned ways of paying have improved with new NFC (Near Field Communication) and EMV (Europay Mastercard Visa) technologies.
It allows customers to make quick contactless payments using smartphones or chip card technology embedded in a physical plastic card.
- NFC
NFC credit cards are a new technology that allows customers to tap their card on an NFC reader to complete transactions. NFC-compatible cards enable people to pay for items quickly and easily, all while providing easy access.
Customers can tap their card on an NFC reader at a retail store or restaurant to complete the transaction with no extra effort required from them besides tapping the card itself. Payments are processed almost instantly.
- EMV
EMV cards are superior in security to swipe-based credit cards and have led to a significant decrease in counterfeit fraud since their introduction. These chips are far more secure than traditional swipe credit and debit cards. That is why they’re becoming the standard for physical payment methods worldwide.
Hence, your business should be accepting these payments as the new standard for physical purchases.
5. Peer-to-Peer Transactions
Peer-to-peer payment apps, like Cash and Venmo, have changed the way that people pay each other. With one tap of a button on an app, you can instantly transfer money to someone else with your bank account.
This tech has made it easy for consumers to pay bills or send gifts right from their phones without any hassle at all.
These are similar to eWallets because they contain a person’s financial information, but unlike traditional wallets that hold money from their bank account, these have separate balances.
Also Read: How to Make Mobile Apps More Effective By Integrating AI and ML?
Final Thoughts
Since customers expect fast, contactless, and easy payment processing methods that are safer than ever before, you need to keep an eye on payment processing trends to attract more customers.
You have to keep yourself up-to-date with various forms of payment, from NFC credit cards or eWallets to loyalty apps like AfterPay. Doing so will help you bring the highest customer retention possible to take your business to a new height.
Frequently Asked Questions
What are the new payment methods?
There are several new payment methods in the market that you can adopt for your business. They are the following:
- Amazon Pay
- Apple Pay
- Google Wallet
- Bitcoin
- AfterPay and ZipPay
- Payoneer
What are the standard payment methods?
A small business owner can accept payment from customers by following methods.
- Cash
- Checks
- Debit cards
- Credit cards
- Mobile payments
- Electronic bank transfers
How is the payments industry changing?
Since more businesses and consumers shift to digital payment methods, the traditional cards-dominated in-store retail channel is being replaced by mobile wallets like Apple Pay. These new forms of payments pave the way for a future where cash or checks may no longer be necessary.
