5 Ways Payments Will Change in 2021

https://finovate.com/5-ways-payments-will-change-in-2021/
http://finovate-wpengine.netdna-ssl.com/wp-content/uploads/2021/05/siora-photography-M40oeDRSgcI-unsplash-scaled.jpg?#

With vaccination programs in full swing in many nations across the globe, the spread of COVID is finally beginning to slow. What is not slowing, however, is the change that the pandemic has brought to consumers’ finances, including how they spend their money.

With that in mind, here are five aspects of payments that will change in 2021, as consumers solidify the habits they picked up last year.

QR codes

As we’ve mentioned on the blog in the past, QR codes have been making a comeback as a mobile payments tool. That’s because QR codes are both versatile and universal– they can be printed out on physical paper and can be scanned by a range of devices across operating systems.

These attributes make QR codes the perfect tool to facilitate P2P payments and to implement low-touch checkout solutions at in-store points of sale. Earlier this year, PayPal partnered with InComm to launch its QR code technology at pharmacy chain CVS. Just last month, Fiserv teamed up with PayPal to enable businesses to use QR codes to offer touch-free payments at the point of sale on Clover devices. And yesterday SafetyPay began enabling users to use QR codes for real time payments in Brazil.

These use cases, combined with the increased demand for low- and no-touch payment options, are fueling the rise of the QR code.

Digital

The case for digital is a no-brainer these days, as consumers have shifted their habits to conduct not only their shopping but also many other aspects of their daily lives online. When brick-and-mortar shops were closed, consumers were left with online shopping (and therefore payment) options.

It is clear that, even as the pandemic winds down, consumers are maintaining these digital-first habits. In fact, shoppers of all ages and demographics are more comfortable paying online than before.

Embedded

With the increase in digital comes the increase in embedded payments and embedded finance. Retailers and service providers have figured out that the more seamless they make the payments experience, the less friction will interfere with the customer experience and the more the customer will return.

By saving users’ payments credentials, ridesharing services, food delivery companies, and even online grocers increase the chance of a return purchase. It also provides the retailer with more data and offers enhanced data surrounding consumer habits.

Visibility

When it comes to security, with more data comes more responsibility. On the flip side, the extra data also brings additional visibility into consumer habits. From bank’s and merchant’s perspectives, this visibility can help them personalize products, services, and even the client experience.

Visibility into consumer spend data also helps banks and merchants anticipate customers’ needs and may enable them to more efficiently market up-sell and cross-sell opportunities.

On the consumer side of things the increased data can help them plan, budget, and manage their spending when the right tools are provided. Even technology as simple as purchase notifications can not only increase shoppers’ awareness of where their money is going, but also can help them prevent fraud.

Collaboration

It is becoming increasingly clear that in the banking and fintech space, no player is an island. By collaborating with other players, both banks and fintechs can maximize their competitive advantages by sticking with their core competencies.

So far this year, we’ve seen multiple successful bank-fintech partnerships, including this week’s mash-up between Ally Financial and buy-now, pay-later player Sezzle. Other headline-worthy mash-ups, such as Apple’s partnership with Goldman Sachs, highlight the benefits of leveraging others’ strengths, even when they appear to be a competitor on the outset.


Photo by Siora Photography on Unsplash

https://finovate.com/5-ways-payments-will-change-in-2021/