The payment processing industry is changing drastically right now, partly because of the pandemic. In this article, we will analyze its main features and trends.
Thanks to COVID-19, the payment processing industry made a giant leap forward. Payments are becoming noticeably simpler, faster, and more secure. People become less enthusiastic about cash and plastic cards because these might transmit harmful microorganisms. Plus, the processes of introducing the PIN or searching for change consume too much time. In this article, we will analyze the current state of the payment industry and will try to predict the most significant trends for the next few years.
The Most Popular Payment Methods
Cash and checks are starting to become obsolete. So far, credit and debit cards still remain the most popular options among all in-store payment methods — but people today use them less frequently than before. Experts predict that in a few years, cards will be largely replaced by contactless payments (such as Google Pay, Apple Pay and so on). Today, most payment apps are focused on B2B transactions. But soon, P2P transactions will become commonplace.
However, credit cards might keep attracting users because of their lucrative reward programs — as well as the opportunity to buy now and pay later. Plus, credit cards feature a higher level of protection than debit cards.
The Visa representatives report that in Europe, 75% of in-store payments are now contactless. In the U.S., this number is slightly lower — just 67%, according to the National Retail Federation. Experts believe that people will have no reason to come back to more conventional payment practices once the pandemic is over. Consumer opinion polls confirm this forecast.
At the same time, more and more businesses switch to digital invoices. This approach is more time-efficient and generates greater customer satisfaction.
More and more e-commerce projects enable their customers to purchase goods or services now and pay for them later, in installments. Their clients especially appreciate the fact that they do not need to pay high credit card fees for this opportunity. Retailers state that thanks to this innovation, the average order value has increased by 20% and cart conversions have grown by 30%.
The customers do not need to wait for a few days or hours until the human management of the online shop approves their application. Artificial intelligence powered by machine learning would calculate a personalized offer for them, relying on big data — and it will take just a few seconds.
This buzzword means the integration of online and offline outlets of a certain business. For instance, a chain of supermarkets has several brick-and-mortar locations and an e-grocery mobile app. Without the omnicommerce approach, it might happen so that a product is available in offline shops — but the client might fail to order it through the app because the product is allegedly out of stock. Thanks to omnicommerce integration, such a situation would never happen.
Here is another example. The client might come to a brick-and-mortar store but use a laptop or smartphone to choose the product. The person would do some online research in advance — and in the shop, they would finalize their purchase. They might use QR codes to get further information about the product on the spot.
This trend implies that the vendor should offer their clients the same selection of payment methods both in online and offline formats. If its site accepts payments from e-wallets and crypto wallets, its offline facilities should do it too.
Unified Money Control Interfaces
In the previous decade, merchants would spend too much time and effort juggling multiple payment systems. If they catered to several countries with different legislations, the process became more complicated. And if they applied different business models to different regions, financial management turned into a disaster.
Now, entrepreneurs can integrate multiple payment options in one smart system — such as Genome. The customers can keep using their preferred cards or web wallets. Business owners can control all their cash flows through a user-friendly interface. All the document circulation takes place in digital format. When the business grows, the system can scale too.
Entrepreneurs do not need to hire developers and ask them to create a custom solution for them. Integrated smart systems will save them considerable time and effort. They can pay all their business bills online and transfer funds anywhere in the world with minimum fees.
Many systems offer integrated interfaces for private clients too. People can use them to open bank accounts remotely, withdraw cash, perform currency exchange with minimal commissions and enjoy many other useful functions.
Every year, approximately $120 trillion accounts are for B2B transactions. It might sound weird, but B2B tech platforms that facilitate a large part of these operations earn nothing on them. Yet if they integrate a payment facilitator, the latter might share a certain ratio of their revenue with them. Thanks to the facilitator, customers will get access to convenient services — and the platform will be able to make some money.
Platforms need facilitators because they would most likely fail to develop similar solutions themselves. That would require too much time, skills and expertise. It is much easier and more profitable to integrate a product that was built by third-party professionals. Besides, if any fraud takes place, the facilitator and not the platform will be responsible for detecting and eliminating it. The platforms will be glad to relinquish some of their responsibility — in case their contractors are trustworthy enough.
The global payment processing industry is undergoing a large-scale transformation right now. Because of the pandemic, the changes have accelerated considerably. Omnicommerse, contactless payments and delayed payments are among the major trends that are reshaping the industry today. Plus, both private and corporate users start to appreciate the benefits of unified money control interfaces. There, they can comfortably manage their cash flow from different payment systems and carry out financial transactions on favorable conditions.