By Julia Idemenko
August 9, 2021
The global pandemic has led to new digital payment methods
How payment processes have evolved and how the COVID-19 pandemic has accelerated the adoption of digital payments.
The way consumers pay has changed dramatically since the pandemic began. Concerned about touching surfaces and banknotes, many consumers gave up cash and turned to digital payment options and other forms of contactless payment. A study of the National Retail Association found that one in five consumers surveyed made contactless in-store payments for the first time since the COVID-19 outbreak. Of these, 62% used their phone and 56% a contactless card to make a purchase. Additionally, around 57% of consumers said they would likely continue to use contactless payments after the pandemic ended.
As the global payments industry evolves, merchants can benefit by employing new technology to stay current and keep pace with changing consumer preferences. Take a deeper look at how the global pandemic drove the adoption of new payment methods and trends in the US and beyond in the Reach Next stories below.
1. The evolution of payments
Society has come a long way since 700 BC. For the first time ever, physical currencies in the form of coins and paper money appeared in China. And while paper checks appeared in Holland in the 16th century, the development and variety of payment systems didn’t really take off until the late 20th century with the advent of debit and credit cards and the accelerated growth of card payment technology. Fast forward to the modern age and we have a wide range of ways to handle financial transactions, from smart terminals to smartphone payments. Read under From Gold Coins to Digital Wallets: The Evolution of Payments more about how payment processes have changed in our lifetimes and what they could look like in the future.
(Photo credit): Gettyimages.com/d3sign
2. Contactless payment
Contactless payment, also known as tap-and-go and tap-to-pay, is done by tapping a payment card or other device near a card reader with contactless payment technology without swiping, entering a PIN and / or signing for one Transaction. This convenient payment method enables customers and retailers to conduct seamless, fast, secure and socially detached transactions, and the use of such payments has skyrocketed in the past year and a half due to COVID-19. Find out more under Contactless Payments: Retail’s New Normal about what contactless payment entails, the advantages and considerations of contactless transactions, and how merchants can adapt to a new payment landscape.
(Photo credit): Gettyimages.com/DjelicS
3. QR codes
Quick Response (QR) codes, which are barcodes that store information that can be read by a digital device, can be used for web links, document access, product identification, loyalty programs, and payments. The COVID-19 pandemic has accelerated the use of QR codes, especially in the hospitality industry, and more and more merchants and consumers are turning to QR payment technology for the myriad of benefits and conveniences it offers. Learn more about how QR codes help businesses become more efficient by increasing customer loyalty, providing a convenient payment method and serving as a powerful marketing tool at Streamlining Digital Payments with QR Codes.
(Photo credit): Gettyimages.com/dowell
4. WeChat Pay and Alipay
WeChat Pay and Alipay together account for 94% of the market share in China, a country whose digital payment systems and mobile wallets are some of the most advanced in the world. For companies outside of China looking to potentially tap more than 1.4 billion potential consumers for whom cell phone payments are the norm, the integration of WeChat Pay and Alipay could provide a critical competitive advantage. To learn more about how the WeChat Pay and Alipay integration is helping companies differentiate themselves and attract new customers, see How WeChat Pay and Alipay Can Strategically Grow Your Business.
(Photo credit): Gettyimages.com/AsiaVision
5. Mobile wallets
A mobile wallet is a digital version of your actual wallet. It can contain credit cards, tickets, coupons, or reward card information. Mobile payments by phone (like Apple Pay, Google Pay or Samsung Pay) and other portable devices are growing in double digits annually, with mobile payment transactions expected to exceed $ 161 billion this year. The advantages of mobile payment include a faster, completely contactless checkout, which leads to a better experience for customers and employees as well as increased data security. Learn more about how businesses can accept mobile payments and grow at Pay by Phone: The Power of Mobile Wallets for Merchant Payments.
(Photo credit): Gettyimages.com/Oscar Wong
6. Smart terminals
Smart terminals, also known as point-of-sale (POS) machines, enable merchants to swipe, enter, or re-enter debit and credit card information for faster and more convenient checkout. Many of these terminals also enable Nearfield Communication (NFC) transactions, which authorize contactless tap-and-pay options. Smart terminals are more than just a payment processing tool, however: they can support the entire business by providing everything from data analysis to appointment booking. Learn more about why more and more merchants are using smart terminals and how they can add value to businesses at How the Smart in Smart Terminal Can Help Run Your Business.
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