The global pandemic has disrupted the financial sector in more ways than one. Lockdowns and restrictions across the world have basically crippled the global economy. However, during those trying times, payments have started to evolve. Here are a few payment trends driving the future of payments.
The payment industry has experienced some major changes in the last year alone. That said, it’s no secret that consumer behavior that’s affected by the latest trends and modern technology can, indeed, have a major impact on how businesses operate or accept payments, in this case.
The global pandemic has forced consumers to try out different things and methods. At the same time, it has also forced companies to adapt to these new changes. Today, the trends that emerged from one of the major global crises are shaping the future of payments. With that in mind, here are a few of those trends that will most likely endure for years to come.
One of the major trends that have affected the payment industry in more ways than one is contactless payments like Apple Pay. As we all know by now, a lot of medical experts warned people that the new virus can easily spread through contact. In other words, handling cash has a high risk of infection due to the virus’s ability to survive on various surfaces for prolonged time periods.
Whether that’s actually true or not, people decided that they won’t take any chances so the cash usage on the global scale is down by 69%. Aside from cash transactions, the use of ATMs is also declining. People simply refuse to use cash, and some businesses even refuse to accept cash despite being legally obliged to do so.
On the other hand, digital transactions have skyrocketed. This form of contactless payments has become increasingly popular in 2020, and it’s quite likely that this trend will continue. Even after the pandemic is finally over, the chances are that consumers will retain the behavior of avoiding cash for quite some time.
Due to the global pandemic, many businesses are struggling financially. The same goes for consumers as many of them are left unemployed or their salaries have been drastically reduced. Still, businesses need to stay operational, and people need to buy necessities, so the solution was born out of mutual needs.
The solution is the buy now, pay later model that many online stores now offer to their customers. This model was based on mutual collaboration between businesses and financial institutions. Businesses get paid right away while consumers create their own installment plans for purchases. A good example of this is the humm90 interest free credit card Australia offers to its consumers.
The way it works is that the consumers can seamlessly shop online and have a variety of interest free installment plans to choose from. By partnering up with financial institutions, businesses in Australia have provided a new level of convenience to their customers, and this trend is becoming increasingly popular across the world.
This trend was created shortly before the pandemic has begun and it has since then gained a lot of momentum. Omnichannel shopping is designed to eliminate the difference between shopping online and in-store.
To provide more convenience and meet consumer expectations, companies wanted a unified shopping experience across various channels and points. For example, you could purchase an item online and pick it up at the nearest store. This would eliminate delivery times and associated fees. However, this convenience became a mandatory option since government-imposed restrictions and safety measures paralyzed the global supply chains.
Everyone started ordering online since they couldn’t go to the store during lockdowns, and the increased demand strained the capabilities of delivery services. Now, people can make online purchases and stop by their nearest store to pick up their goods. This is not just a convenient payment method, but it also allows people to avoid crowded stores and reduce human contact as much as possible. When this is all over, omnichannel shopping will continue on, and payment methods associated with this approach will continue to flourish.
As mentioned before, many people are left unemployed or left with a portion of their earnings due to the global pandemic. Now, people are turning towards digital assets as a means of payment. In fact, many people have invested or otherwise obtained some cryptocurrencies over the past decade or so.
Today, more and more businesses are accepting cryptocurrencies as a means of payment. If you don’t have the money to purchase goods, you can still rely on your digital assets. This created new opportunities for people to buy whatever they need, as well as for online companies to stay in business even during the crisis.
Cryptocurrencies help bridge the gap and provide a solution in times of need. The trend will encourage every business to accept cryptocurrencies as payments and it will most likely shape the future of the payment industry.
The future of payments is constantly shifting and changing. However, the global pandemic that happened so suddenly and unexpectedly has accelerated these changes tenfold. Changes to the cash cycle that would normally take at least a decade to settle in manage to reshape the payment industry in just a single year.