The population of Millennial and Gen Z has been growing immensely, and the need to redefine online payments is becoming complex by the day. The race to innovate is already into overdrive, and the speed is not letting up any soon. Because of this, payments companies and merchants must forestall and constantly flex to remain at peace with the budding needs of today’s consumer.
If you have been selling online, you already know that the e-commerce industry never stands stills. It’s a turbulent niche that rewards agility, generously, buts it doesn’t forgive inaction. In this spirit, all merchants must remain on their toes to deliver seamless customer experiences and satisfy the needs of the knowledgeable generation.
As a global payment processing company, Aretosystems works relentlessly to boost consumer experience in online payments and digital marketing. We are always looking ahead, and our desire to provide solutions that benefit merchants, now and in future, is unrivalled. We have explored the online payment scope to unearthed trends that we believe hold the key for the future of online payments.
These trends will change the way consumers pay, how merchants accept payments, and how payment processors facilitate payments in the future.
Approximately 46% of consumers today use mobile wallets. The number is estimated to grow to 64% by 2020, which represents a 39% increase in usership. Studies have also shown that 23% of consumers, today, are willing to give up their mobile banking app for a mobile wallet. Additionally, it is reported that in 2016 mobile wallet payments accounted for 75 billion dollars, and the number is expected to reach 503 billion dollars by 2020.
From this data, it’s clear that mobile wallet is one of the fastest growing trends and is poised to become a monumental shift in the fintech industry. Mobile wallets enable industry players to deliver seamless, consumer-focused payment experiences with proactive balanced alerts, immediate rewards, security, convenience, and speed.
It’s predicted that mobile wallets will continue to gain traction as payments players focus on bringing more value-added services. With the addition of new features such as a single view of account, robust user authentication, and other security features, the mobile wallet is undeniably one of the trends to watch out for in the online payment universe. Here are some of the things to do to remain at peace with this trend:
- Being innovative with the utilization of online payment incentives
- Optimize bill pay within the mobile platform
- Integrate Person-to-Person into mobile app
- Have your organization’s card “top of the mobile ”
Gen Z is rising
According to Accenture 2017 North America Consumer Payments Pulse Survey, 68% of Gen Z consumers fancy P2P payments. Besides, 33% of this age group want to share their payments on Facebook, Twitter, SnapChat, and other social media platforms. It is good to note that 70% of this generation in the United States use mobile banking apps daily. It is also predicted that the population of Gen Z will make up to 40% of all consumers by 2020.
It’s clear that Gen Z is the new kid on the block. Their growing population is giving innovators something to think about. Their needs are unique, and satisfying them is a top priority for online payments innovators. There is no doubt that this will shape online payments and banking trends.
Customer Experience (UX)
As Accenture notes, customer experience is the new gold. Customer experience (UX) is rapidly becoming the principal competitive differentiator in the online payment universe. Unique payment methods developed by nonbanking organizations such as Aretopay, Apple Pay, Google Pay, and Samsung Pay have taken the bar a notch higher, by redefining the way customers experience online payments.
Let’s face it: attracting new customers to a business is one thing and retaining them is another. The glue that holds these facets together is customer experience. It’s true; the most successful e-commerce entrepreneurs are present in the moments that matter most to their customers. They hold the customer’s hand throughout the payment journey, across all touch points to deliver seamless digital experiences.
In the same sense, online payments have moved way beyond the transaction. There is a growing recognition of the need to deliver experiences that align not only with how customers pay, but also with the aspects of life that affects them. As a result, industry Players are creating payment experiences around the human needs to power exceptional, digital commerce experiences.
According to a report by Capgemini, the global digital payments volumes are projected to reach approximately 726 billion transactions by 2020. Besides that, it’s predicted that over the next 5 years. Blockchain technology will reduce compliance costs by 30-50% and the cost of account reconciliation by 70%.
Blockchain technology is an ingenious recordkeeping invention behind bitcoin. The technology is predicted to play a significant role in the future of online payment processing solutions. Even though the traditional banks and the financial world has been skeptical, every industry player is aware of the benefits the technology delivers.
With secure real-time verification, encrypted distributed ledgers, and fast payment processing, blockchain technology is proving to be the real deal. The technology is here to stay and is expected to lead more financial inventions in the future.
As technology continues to evolve, new online payment methods continue to emerge. The plethora of payment methods gives consumers the freedom to use whichever payment method or channel that suits them. Because of this, today’s consumers are no longer bound to a single payment method.
The proliferation of payment processing channels online, at the point of sale, and on the go, is a highlight of modern commerce. Payment methods that were once location-specific are now device enabled. It is just like that, every device is now becoming a payment acceptance device.
Even better, payments are being added to disruptive technologies such as IoT devices and voice assistants. As predicted by Gartner, by 2020 there will be 20.8 billion devices connected to IoT. Joining the dots, it’s easy to see that technology will continue to define how payments are accepted, where and by how.
Consumers never get enough rewards. Research by Accenture found that 48% of the modern consumer would switch the reward cards, to derive more value out of every purchase. 42% of consumers are willing to change cards to receive huge signup bonuses. Furthermore, 66% of today’s consumers buy from businesses that allow them to redeem rewards/bonuses at the POS or POP.
It’s vivid the reward revolution is here, and it’s hitting new levels. As a result, time is ripe for industry players to alter the nature of rewards and eliminate the untenable friction between rewards and the exchange fee. It’s time to invent new reward playbook that will provide more value for consumers. Technologies such as Google Smart Tap Technology are pioneering innovative ways to redeem and pay loyalty card instantly.
Also, there is an increased need to personalize rewards, since this what consumers crave. There are tremendous opportunities for online payment players to create groundbreaking rewards. It also predicted tomorrow’s rewards would not be based around payments. The rewards will be more experience-centric with digitized offers and coupons that reflect the consumers’ lifestyle needs.
Speech is gradually becoming the new invisible computer interface. If everything goes to plan, in the next 10 years, 50% of computer interactions will be done through voice.
Voice-enabled assistants have caused a buzz among consumers with industry giants such as Amazon, Apple, and Google launching AI-infused applications that function via conversational voice interfaces. Globally, there has been a 29.4% compound annual growth rate of customers using voice assistants. The number of people using voice-enabled devices is expected to reach 1.83 billion by 2021.
Therefore applications such as Google Assistant and Alexa, are an integral part of the day-to-day life of millennial and Gen Z. From checking weather, shopping, and setting up reminders, these applications handle most operations and influence the mobile-tech experience.
The biggest beneficiary of these incredible inventions has been the financial services. Clearly, the voice-enabled devices are the next cutting-edge frontier in online payment space. The devices were initially designed as a means of interacting with customers, but have grown beyond customer service to online payment services.
It no secret that voice commerce is on the rise and is destined to change how customers pay. Though it is still at the juvenile stage, the trend holds the potential to renovate the entire online payment scope. As it stands, 8% of consumers use voice-enabled devices to buy product/services online or to transfer money. The trend will continue to grow, and it is expected by 2022, 31% of consumers will be using voice-assistants to buy product or services online.
From mobile wallets and the rise of a new generation to customer experience and voice commerce, it’s clear the online payment is a universe staring at a new future. The future look bright with plenty of trends that promise to change the game in this scope. There are great opportunities for online payment players, but to reap the benefits, proper action is demanded.
The scope is changing rapidly, but entrepreneurs who will evolve their business strategies, systems, culture, and operating models will remain buoyant. Even when the ride gets tough.