What will payments look like in 2022 and beyond? In “This is how payments are now processed“Adds Dave Fura, SVP, Head of Card Solutions, FIS 32 other payment managers to discuss what the “new normal” of payments looks like. Fura is studying how the checkout process has changed along with changing consumer preferences due to the pandemic.
Over the past year, consumers have spearheaded the rise of several innovative payment technologies. These technologies have changed the consumer experience as well as their preferences and expectations of the payment process.
Remember the payment process a year ago: a customer walked into a store to buy something, saw what they were looking for, and then went to the checkout area. In most cases, they would either pay cash or use a debit or credit card.
Due to the changed consumer preferences due to the pandemic, the checkout process is now completely different. Those same customers now expect options and instant satisfaction when it comes to how and when to pay for their items. In person or online, consumers demand that the entire process be quick, smooth and secure. This has led to the rapid adoption of technologies such as mobile wallets, contactless payments, and Buy Now, Pay Later (BNPL) solutions.
Respondents to the FIS Pace Pulse 2021 survey found that COVID-19 restrictions have changed many consumer behavior. The proportion of respondents who used mobile wallets or contactless payments at the checkout more than doubled between April 2020 and February 2021, while the proportion with mobile payments rose by almost two thirds. This growth is expected to continue for generations as the pandemic pushed things like menus and instructions to mobile devices – convincing enough for even the most digitally resilient consumers to use these technologies. Drastic consumer shifts like this mean financial institutions and retailers need to ensure that paying with a mobile wallet is a viable payment option in their businesses.
According to FIS’s Worldpay Global Payments Report 2021, the “buy now, pay later” market is expected to grow 181% by 2024. According to the same report, BNPL services grew nearly 78% in 2020 – the biggest jump of any payment method – and are projected to account for 4% of global ecommerce spending by 2024.
The concept of post-purchase installment programs is not new, but the ease of use, flexibility and mutual benefit they offer at different stages of the value chain have made them one of the fastest growing segments in payments. Post-purchase installment loans give cardholders the flexibility to make larger purchases and can increase card usage and preference by giving cardholders more choice and control. Businesses can use post-purchase installment loans to add features to differentiate their offerings and increase customer loyalty to their brand.
The payment process is completely different than it used to be and will continue to adapt as new solutions develop. Technology developers like FIS take on a supportive role for their customers and combine them with the right payment technology that meets all the expectations that the end user has of their payment experience.