5 Digital Payments Trends We Expect To See In 2021
The first quarter of 2021 is almost in the books and while things could be changing faster in terms of the virus, the new digital payment landscape is already starting to take shape. Today, we’ll take a look at five digital payment trends we expect to see going forward and how you, as a merchant can prepare for what’s coming your way.
Providing Diverse Payment Methods
The pandemic has caused a global eCommerce boom and even though merchants have managed to ride the wave quite well, the real battle has just begun. With everyone on a level playing field, those that will rise to the top are the ones that can deliver a high-level, high-quality customer experience. One of the most important, if not the most important, part of that experience is checkout and payment methods.
Traditional credit card and PayPal checkout is no longer a luxury but a prerequisite, and customers are starting to seek payment methods that speak to their personal preferences. 2021 is the year where customers seek more convenience and choice all while they are guaranteed a high level of safety.
Checkouts will resemble product carousels as the choices will include payment methods such as cryptocurrencies, cash on delivery, biometric fingerprint cards and phone-to-phone payments. Is your eCommerce prepared for the diverse payment method battle?
Saying Goodbye To Passwords
The death of the password has been a long time coming. Verizon’s Data Investigations Breach Report for 2020 found that credential stuffing is a growing cybersecurity problem. Why is that the case? Because people either reuse passwords or create passwords that are weak enough to break.
According to Verizon, the reported number of credential stuffing attempts per year ranges from thousands to billions. As Verizon researchers very well put it, “Criminals are clearly in love with credentials, and why not since they make their jobs much easier?”
Security is not the only issue with passwords. According to Swoop, 75 % of users abandon a site after a password reset and 30 % of users quit a payment process if it requires setting a password. Those are some staggering failure numbers. Where is the market trending towards? Biometric authentication methods.
Finder and face ID, magic links and one-time passwords (OTPs) are gaining steam. For consumers, passwordless authentication meets the expectation of fast, easy and accessible tech solutions they are used to. Passwords are outdated and feel very manual, slow and untrustworthy.
Voice Payments Will Finally Be Heard
Voice recognition technology has had a slow and challenging ride thus far. From the looks of it, 2021 will be its breakout year.
According to PYMNTS’s “How We Will Pay 2020” study, 23 million consumers who own voice-activated speakers now use them to make purchases while going about their daily routines. According to Loup Ventures data, three-quarters (75%) of U.S. households will own smart, Alexa-like speakers by 2025. The data also reveals that voice commerce sales are expected to reach $40 billion by 2022.
Those are numbers that point to a very clear direction: people are getting more and more comfortable with using their voice to pay for products. The question you, as a merchant, should be asking is whether your business is geared towards adopting and responding to voice recognition payment tech.
Buy Now, Pay Later
The Buy Now, Pay Later (BNPL) service has gained popularity during the COVID-19 pandemic. With people barricaded in their houses and their income in question, a loan-like, installment-based payment solution was about to make its appearance.
Companies like Klarna, Afterpay and Affirm have popularized the BNPL method, expanding on the idea of convenience and personalization. Customers can buy products online and pay at their own pace. That usually happens in interest free weekly installments for up to 30 days after the purchase.
Just how successful is the BNPL market? A recent report from IBISWorld predicts that the Buy Now Pay Later industry will continue to grow 9.8% per year over the next five years and eventually reach $ 1.1 billion.
While merchants enjoy the benefit of up-front and in-full payments, payment providers are burdened with the credit risks, chasing after late payments and dealing with the complexities of the BNPL service. While this trend is one most retailers will jump on board with, finding the right payment provider is of critical essence.
QR Code Payments Will Become A Thing
QR codes might not make headline news but it seems like they are on the rise. Recent research from MobileIron showed that 80% of smartphone users across the UK and Europe said they have scanned a QR code at least once in their lifetime with 40% claiming that they scanned one in the last seven days.
What makes QR codes favourable is how flexible, modern and easy they are to use. Consumers only need a mobile phone and they are good to go. QR codes leverage the digital wallet technology already found on consumer smartphones, such as Apple Pay, Samsung Pay, etc. It’s contactless and inexpensive and something we will be seeing more of in 2021.