How To Prepare For The Digital Payments Future

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Digital payments have evolved significantly in recent years, and this evolution has been accelerated as a result of the pandemic. Consumers quickly adopted new preferences, favoring digital over analog and becoming more tech-savvy in record time. As convenience and health-related concerns continue to push consumers toward remote and touchless options, digital payments and online payment gateway will grow.

Cash is No Longer King
Experts agree that the pandemic has hastened the transition to a cashless society. Whether or not this occurs in our lifetime is debatable; however, the idea may have a troubling ripple effect on the under- and unbanked.

There are numerous parties who argue each side's pros and cons. On the one hand, card companies (who stand to benefit from a shift to digital payments) argue that digital payments will reduce money laundering and tax evasion while reducing the resources required to handle physical currency. Others argue that cash should not be phased out due to privacy concerns, the marginalization of the under- and unbanked, and digital fraud. Regardless of the arguments on either ...
... side, digital payments are on the rise, and payments organizations must keep an eye on changing consumer behaviors in order to stay ahead of the curve.

Peer-to-Peer (P2P) Payments
The global peer-to-peer (P2P) payment market was worth $1,845.29 million in 2019 and is expected to grow at a CAGR of 11.8 percent over the next seven years to reach $4,491.14 million. It's no surprise that these types of digital payments have performed well during the pandemic; they provide an alternative to cash for people looking to exchange funds with friends or pay for services such as haircuts, rent, and other non-traditional payment methods. There are no fees associated with this type of payment because P2P apps are linked to a person's bank account, debit card, or credit card.

These social-distance payments provide flexible payment options, but they are also being leveraged in novel ways as a result of Covid-19. People in need may have previously turned to popular crowdfunding sites, but they are now leveraging P2P payment platforms to send and receive financial assistance from friends, family, and strangers alike.

Mobile Payments
Fear of touching surfaces has sparked a new growth spurt for mobile payments, with digital and contactless payments providing people with a seamless, germ-free way to pay. As a result, merchants everywhere are expanding their mobile payment options: roughly two-thirds of retailers now offer some form of no-touch payment. More than half of retailers (58 percent) accept contactless cards, up from 40% last year. Mobile payments are also on the rise; more than half of retailers (56 percent) accept digital wallet payments via mobile phones.

Prior to the pandemic, mobile wallets had experienced a less-than-stellar growth rate, with adoption rates lagging behind. Mobile wallets have taken center stage as the coronavirus has prompted people to seek out alternative, touch-free payment methods. According to one report, the use of Apple Pay for in-store transactions has increased by 59%. 7.8 percent of consumers with Google Pay-enabled phones are now using the mobile wallet to make POS purchases, up from 4.9 percent in March 2020.

Preparing for the Future of Digital Payments
The most important takeaway from the findings on digital payments and the best online payment gateway, particularly the increase associated with the pandemic, is that consumers want options. It emphasizes the significance of omnichannel payments and accepting multiple payment types for retailers. It should serve as a wake-up call to payment companies about the importance of streamlining and securing digital payments.

The pandemic has highlighted the importance of remote payment options, but it has also highlighted how quickly consumers can become acquainted with new payment types in order to meet their own needs in a pinch. Payment service providers and retailers should not be afraid of emerging payment technologies, but rather focus on potential use cases and how they can improve the customer experience from beginning to end.