In the past, a majority of payments were made by cash or check. However, digitalization is the new way of overcoming the cumbersomeness of cash and offering a more seamless experience. We are now widely a cashless society as the volume of credit card transactions has significantly increased. According to Statista, the number of non-cash transactions in the United States in 2012 was 127.7 billion compared to the projected transactions of 211.7 billion in 2021. It is obvious digitization is the payment trend of the future.
As with anything else, payment technology goes through many changes, especially over the last few years. The array of payment trends have expanded dramatically and will continue to grow exponentially. Not only will payment technologies change, but customer expectations will too, which will give merchants no choice but to keep up with the demand. The current generation of people are actively living on their smartphones and embracing any and every new technology coming out.
The array of payment trends have expanded dramatically and will continue to grow exponentially.
Today, high-tech innovations, including mobile payment, digital wallets, cashless, contactless, cryptocurrencies, and wearables are transforming the payment landscape. This changed dramatically in 2018 and is considered to have been an outstanding year for this technology. Considering the number of enhancements to the existing payment trends in 2018, how will they evolve in 2019?
Mobile Payments
Mobile payments are money paid through a portable device such as your smartphone or tablet. Mobile payments can also be used to send money to friends, family members, or provide mobile payments on a website or mobile app by scanning a barcode. When you purchase a product, your money will be deducted off a preloaded gift card, or paid by credit or debit card linked to the app.
As cash becomes more useless for day-to-day transactions, mobile payments will continue to disrupt traditional payment trends in 2019. The increased uptake will involve not only millennials but also baby boomers and Generation X because of increased everyday purchasing activities.
Digital Wallets
Say goodbye to the traditional leather wallet and say hello to a digital wallet, also known as an e-wallet. Digital wallets work through apps on your smartphone, most of which link to your bank account, debit and credit card information. Users can simply pull up the app on their phone and wave or tap the phone over a compatible contactless payment terminal for instant payment. Digital wallets can also store your subway passes, bus tickets, concert tickets, loyalty cards, or even unlock the doors to your house.
When it comes to the digital wallet as a mode of payment, there is expected high growth in consumer adoption. Also, it is gearing up to be on the top list for the eCommerce trends in 2019. Google Wallet, Apple Pay, Samsung Pay, and Android Pay are expected to continue dominating the industry for the digital wallet.
Cashless
Cashless payment is an exchange of funds by check, debit, credit card or other electronic methods rather than using cash.
Currently, over 70% of payment transactions are fulfilled with the use of mobile devices. Due to the convenience and leveraged security, the cashless payment landscape continues to attract the interests of many shoppers. A number of countries are envisioning a substantial increase in cashless transactions. For example, Sweden is leading nations who are going cashless; they are expected to be the first totally cashless society in the world. According to Business Insider, currently only 2% of the total value of transactions made in Sweden consist of cash, and it is expected to decline to less than 0.5% by 2020, solidifying this as one of the worlds major new payment trends.
Cryptocurrencies
Cryptos are a digital currency in which encryption techniques are used to regulate the generation of units and verify the transfer of funds, operating independently of a central bank. Cryptocurrencies are growing over the years, but widespread use may be slowed due to countries such as China and Russia, who prohibited them due to the potential links to different illegal activities. However, it was reported NASDAQ is working with the Commodity Futures Trading Commission to launch Bitcoin, giving it the potential to be a solid payment trend in the future.
Wearables
Wearable technology is made up of devices like smartwatches and activity trackers.
One of the major features of them is their ability to connect to the internet, enabling data to be exchanged between a network the device.
Payments continue to evolve together with consumer habits and technology. Although mobile payments are considered to be the most potent when it comes to consumer transactions, wearables are believed to be the next wave in contactless payments.
Smartwatches are expected to gain interest and could be an integral part of the daily habits of people in the near future. Because of the desire to simplify the payment process, many payment companies and the financial institutions will switch to accepting smartwatch and other wearables payments.
With the world of payment processing trends changing rapidly, staying competitive in the 21st century and keeping up with future payment trends is imperative. Ever since the EMV liability shift, merchants have been switching over to smart payment terminals and throwing out the standard merchant payment processing machines. Upgrading to a terminal that can accept all of the payment types mentioned here will not only better suit your business, but also your customer’s needs as well.
Questions?
Call us at (888) 510-9871 or email info@redfynn.com. You can also check out our website at www.redfynn.com.
