Fueled by a desire for enhanced safety, security, and convenience, U.S. consumers have embraced touchless payments to purchase products and services, flocking to popular digital wallet services like Apple Pay, Google Pay, and Samsung Pay at small businesses of all types.
In fact, during the first quarter of 2020, Mastercard found that 79% of consumers had used contactless payments—a 40% jump from 2019's opening quarter. Let's take a closer look as to why.
Recognizing the popularity of multiple payment methods.
Although once propelled by pandemic-era necessity, alternative payment methods have cemented their place in mainstream life as consumers ditch cash and think twice about touching traditional credit card terminals. Plus, the Mastercard New Payments Index revealed that 93% of people will consider using at least one emerging payment method in the next year.
Given consumers' swelling adoption of flexible payment methods, businesses must evolve how they accept payments or risk being left behind. In a September 2020 survey of 2,400 consumers conducted by PYMNTS and PayPal, 57% said that merchants' digital payment offerings impacted their willingness to shop in certain stores. Meanwhile, 1 in 4 businesses in NMI's 2020 Holiday Spending Insights Report claimed they had lost a sale because they didn't have contactless payment options.
Your business need not face the same fate. Today's businesses, after all, can rather easily accept several different forms of digital payments and offer choices at checkout.
Grabbing the low-hanging fruit in contactless payments.
Currently, digital wallets like Apple Pay, Google Pay, Samsung Pay, and PayPal are among the most popular and most sought-after contactless payment options. Even more, they're simple to incorporate into your business and simple for your customers to use.
But, what exactly is a digital wallet?
Sometimes called a mobile wallet or e-wallet, a digital wallet securely stores debit and credit card information on one's smartphone. Using near field communication (NFC) technology, an industry-standard technology that works across short distances, your customer can position their smartphone over a card reader and enjoy a quick, seamless transaction using the mobile payment solution of their choice. NFC payments with encryption and tokenization also offer security on par with the ubiquitous "chip" cards.
Looking beyond digital wallets.
Although Apple Pay and Google Pay might hold the touchless payment lead today, several emerging payment technologies are gaining attention, particularly among younger consumers who have grown up in a digital world and shown a greater willingness to push technological boundaries.
- QR codes: Once seemingly on their way to the tech graveyard, QR codes enjoyed a renaissance as interest in contactless payments soared. Your business can generate a QR code on a receipt or place a QR code at checkout to enable your customers to pay directly from their smartphone. It's a clean, convenient, and ready-made solution that allows for touchless payments.
- Biometrics: A fast-growing field, biometric payments often use a fingerprint linked to a credit or debit card to conduct a transaction—the consumer does not need a PIN or a password. Though consumers have expressed interest in the convenience and security of this (literally) at-your-fingertip solution, biometric payments are only slowly gaining traction in the marketplace.
- Cryptocurrency and Bitcoin: Cryptocurrency and Bitcoin might well be on their way to gaining mainstream acceptance, especially given millennials' and Gen Z's accelerating interest in digital money. Cryptocurrency's use of blockchain technology makes it particularly appealing from a security standpoint, while businesses are intrigued by transaction fees often sitting at or below 1%.
Multiple payment methods: A modern-day necessity.
Research company Gartner predicts that 80% of ordering, checkout, and payment services will be contactless by 2024. Therefore, as consumers grow increasingly comfortable with touchless payments and interest in flexible payment methods rises, businesses will need to carefully monitor developments and consider how they can expand options at checkout beyond cash and plastic.
As customers push for safety, convenience, and security with their transactions, your operation's ability to accept multiple payment methods and meet customers on their terms will become essential to its long-term performance.
With the right technology and payment partners, you can keep pace with ongoing change in the payments world and deliver the choice your customers crave. This will help your business provide its guests a better, more responsive customer experience and, ultimately, cultivate more loyal relationships.