By Jeh Holsomback
Secure Payment Solutions Inc.
Payment methods are evolving as tech savvy younger generations come of age and develop purchasing power. As consumers, they demand instant, easy, mobile options. This will give rise to rapid adoption of several payment methods in 2019 that not only eliminate the need for cash but obliterate reliance on physical cards as well.
In its report titled The rise of contactless payments around the globe, Visa projected 50 percent of its transactions would be contactless at U.S. merchants that accept contactless payments by the end of 2018.
The U.S. lags behind in contactless adoption compared to the rest of globe. In 2017 in Canada, Visa processed 33 contactless transactions per second; the U.K. saw a 97 percent increase in adoption year-over-year. For 2019, we expect the United States will follow the rest of the world in regard to contactless payments.
Shopping through proprietary retailer mobile apps is accelerating, and quickly. Retail Consumers Adopt New Technology, a Synchrony study, reported 67 percent of consumers have downloaded a retailer app on their phone, and many expect to make purchases directly through the app. This mobile wallet technology is becoming the norm and even a preferred way to shop.
Say hello to Gen Z, the generation, born about 20 years ago, that is displacing millennials as trend setters. This subpopulation was born with mobile devices in hand and, as their purchasing power grows, so will demand to pay via phones.
Previously, small transactions between family and friends like splitting checks or borrowing money were primarily cash-based. That is shifting with the rise of peer-to-peer payment applications. Venmo, Square Cash and Zelle are the three leading apps.
This trend is fueled by the same demand for quick, digital experiences that is dominating virtually every area of tech, with no signs of stopping. eMarketer estimated P2P transactions could rise from $156.49 billion to $244.03 billion by 2021.
The rise of voice-assisted shopping has opened the gates for voice-enabled payments. It will be interesting to see to what extent wary consumers warm to this payment method in 2019. In a Nov. 20, 2018, article, PaymentsJournal reported that only 7.4 percent of consumers have used a voice assistant to make a credit card payment.
Contactless payments, mobile wallets, P2P payments, and voice-enabled payments are going to continue to increase. Make sure you are developing options that enable merchants to meet consumer demands for these payment methods. Delivering innovative solutions and staying in front of evolving trends is vital to winning business and being successful.
Jeh Holsomback, CEO of Secure Payment Solutions Inc., has been active in the payments space for 15 years. He has helped to grow SPS from founding to 27 employees with clients in all 50 states. SPS is involved in all aspects of electronic payments, including the development and launch of Paradise POS. He can be reached via email at email@example.com.
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