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5 Trends Driving the Future of Payments

5 Trends Driving the Future of Payments

Perhaps the forces that have altered the course of 2020 have only expedited the natural progression of payment solutions, but we’ll never be entirely certain. What is certain is the fact that even in the years prior to 2020, more companies have emerged with smarter and exceedingly flexible payment options to help businesses become more appealing, but also to help customers pay for what they want with ease. Knowing that, some of what is happening right now has been a long time coming, but has only become more prominent due to the pandemic.

There are, however, other causes for the surge in innovative payment solutions across the globe. Here, we’ll delve into these causes and the accompanying “consequences” in the form of creative and agile solutions. Let’s see what kind of payment options we will see in 2021 and beyond, the trends to change payment behavior among customers, and other factors that will affect various industries everywhere.

Postponing Payments

Paying in installments is far from a novel concept, but as the result of the pandemic, the economic crisis, and the many issues people are facing now, we can expect more to start leveraging the opportunity. What this means is that more companies, too, will have to offer such payment structures in order not to lose customers to their competitors who have had the sense to introduce the “buy now, pay later” option.

The goal is to simplify the payment process for customers, but also to help boost customer loyalty for businesses who depend on repeat purchases and overall customer loyalty.

Location-Based Providers

Globalization has introduced a slew of payment solutions that help brands attract a global audience. However, with the increased preference for personalization and localization in order to help companies appeal to local audiences, there will be more solutions that reflect this particular shift in customer mindset. For example, with the Australian e-commerce market booming, brands operating in the local market will look to implement payment solutions that appeal to that demographic.

What’s more, competitive offers such as the humm90 interest free credit card in Australia will become more alluring to businesses as well as customers to make sure they have convenient, cost-effective solutions at hand. A combination of interest-free payments and location-specific credit cards will surge in the upcoming period as a response to how different buyers prefer to buy and which payment providers they trust.

Digital Currencies on the Rise

In addition to cryptocurrencies, to which we’ll get shortly, the world is rapidly moving towards cashless systems. How? The example of Sweden’s e-krona shows that a society can indeed function on a digital currency equivalent to its original, paper currency. The goal is to increase sustainability, reduce deforestation, and simplify transactions for all.

Since only 10% of Sweden’s population uses cash to begin with, the move makes perfect sense, so it’s only a matter of time before the world follows suit. What’s needed is a secure payment infrastructure to ensure that all transactions with the new digital currency will be as safe as the traditional methods of payment.

Cryptocurrencies Enter the Mainstream

The low fees, unparalleled transaction security thanks to the Blockchain, and increased market relevance are all driving the growth of various cryptocurrencies. While they are still fairly new in the realm of everyday purchases and to companies that exist to sell on a B2C basis, there are brands that have already implemented crypto-based payment modes and that have started using bitcoin and other cryptocurrencies as an incentive for customers.

Soon enough, we can expect more from this particular payment method. The technology behind it will soon become incorporated into other solutions, and as governments slowly create policies to regulate exchanges, it will become easier to accept payments in crypto and encourage crypto-based investments, too.

Contactless Is Here to Stay

Did you know that money can carry pathogens such as viruses and bacteria that can end up harming those who come into contact with cash? This bit of information has become more widely known and recognized during the pandemic, as more people were looking into different ways to protect themselves from getting sick. The emphasis on increased hand-washing and the use of hand sanitizers, however, has little impact on money itself. The obvious solution? Contactless exchanges.

If you are using a POS payment system to integrate all payment providers, you already know that it’s possible to enable touchless payments, too. There are Bluetooth-supported phones that can be used for these payments, as well as credit cards that can be used with some of the newer card-reading terminals. To reduce any contact with money as the germ-carrying vessel that it is, more people will turn to contactless for safety as well as convenience.

From diversification that will attract customers to brands that ensure it, all the way to increased digitization in every possible respect, these payment trends will reshape the future and the ways in which we exchange money, as well as sell goods and services. Those who embrace these trends and the accompanying changes will lead the way and have the necessary potential to build strong customer bonds while increasing transactional security, whereas those that fail to do so will easily fall behind.

We can expect other, similar payment innovations to surface in the years to come. After all, with the pandemic changing how we shop and interact, it’s only natural to create and find solutions that will surpass the options we have today.

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by Keith Coppersmith // Keith is an Adelaide based business journalist specializing in startup growth, business technology, and marketing.

Opinions expressed by contributors are their own.