Trend #1: Mobile Payments
For people under 30 in North America, mobile payments are simply the de facto method used to purchase and pay for everyday items. An entire generation is coming for whom the concept of paper checks, cash money, and even plastic payment cards will be as foreign as 8-track music players and rotary phones. Mobile payment technology can be used to pay for everything from groceries to pet care. The change-over to mobile won’t happen completely overnight, but the days are swiftly approaching when making a payment with a card will be almost unheard of.
The reason for the quick ascension of mobile payments is easy to understand—it’s simply easier. The consumer doesn’t have to carry around extra luggage, and the merchant doesn’t have to bring a card swiper to your door while delivering your pizza. For many people, mobile payment has become the final step towards a cashless society. In an age of increased awareness of disease and a general desire to create social distance, it’s easy to see why most people consider mobile payments to be the inevitable king of eCommerce.
Trend #2: Google Pay and Apple Pay
While plastic continues to dominate the brick-and-mortar retail sector, there’s no denying that eWallets such as Apple Pay and Google Pay are starting to make significant inroads. After all, most people these days are much more likely to forget their wallet than they are to forget their cell phone and making the switch to Smartphone payment methods cuts down on the number of items the average person must carry around in their pockets. Peer-to-peer payment technologies may not have replaced traditional card payments for in-store purchases yet, but that’s certainly the direction the industry is trending.
Trend #3: Single-Click Payments
Many companies, most notably Amazon, have come to rely on so-called “single click” payment methods. The idea is that by holding your credit and shipping data online, they can allow you to choose an item and pay for it immediately. No checkout carts, no payment forms, just one click and done. For all further purchases made by the merchant, payment data is filled in automatically. This form of payment system encrypts the customer's card data using a process called “tokenization.” The token becomes the customer’s identification for future purchases. Buyers can thereafter make one-click payments if they have previously paid on the website.
The result is that card tokenization replaces confidential bank card data with a unique token that allows you to pay for purchases online without entering your card details. Tokens are secure and safe to use. They cannot be decrypted by fraudsters. Their main advantage is that the client can automatically pay on any website without giving it direct access to their card details.
Trend #4: Contactless Payment
Contactless payments are transactions made via Radio-Frequency Identification (RFID) or Near Field Communication (NFC). Normally, the consumer taps either a contactless chip card or payment-enabled mobile device on a contactless-enabled POS terminal. These types of payments are popular because they make checkouts faster and easier for the consumer.
During the pandemic, contactless payments technologies have become increasingly popular. In Australia for example, contactless payments accounted for 55% of all point-of-sale purchases in 2019.
Trend #5: Cryptocurrencies
There was a time when cryptocurrencies were merely a novelty, but in recent years crypto has matured into a viable payment method. Once the domain of dark web hackers and shady, untraceable business deals, crypto has exploded into the mainstream to become one of the fastest-growing payment methods around.
Crypto offers many advantages over traditional payment methods. Perhaps the most attractive of which is the fact that crypto relies on what is known as a “Push” payment method. This means that once funds are in your account, they can never be charged back. This has become increasingly attractive as cases of so-called “friendly fraud” have risen in recent years. Given how easily a business can lose their MID merely by accruing a slight raise in chargebacks, it’s no wonder that crypto is being looked at very carefully by more and more mainstream businesses.
Cryptocurrencies like Bitcoin are powerful financial instruments. They can transfer wealth immutably and are decentralized. This allows customers and merchants to transfer wealth without the need for banks. The downside is that most blockchain-related payments take longer to fully complete, and relatively few people have personal blockchain accounts. While still not fully developed, cryptocurrency is well on its way to becoming a major player in eCommerce.
Digital payments aren’t just the future. They’re our reality, right now. The transition from paper money and metal coinage isn’t some far-away, semi-mythical idea any longer. It’s here, and it’s growing. Nuvei helps you ensure that you can take full advantage of every possible payment method so that you never leave money lying on the table. We keep abreast of these and other payment trends so that you can focus on growing your business.
Obviously, new trends will continue to appear, and old trends might fade into obscurity. After all, 50 years ago no one would have imagined payment via near-field technology or purchasing via retinal scan- or if they did, it was only in the context of fantasy or science fiction. We at Nuvei realize that the future always inevitably arrives, and we’re doing our best to keep you ready for it.