5 Payment Methods Disrupting the Way Consumers Shop

The future of payments is looking increasingly different from what we are used to. Online payments through forms and payment gateways have been overtaking cash transactions for some years now, and recently cardless payments have accelerated in popularity, thanks to the ubiquity of the smartphone.Many online businesses have been using webcam screen recorded videos to promote payments through forms, as many screen recording tools allow you to add forms at the end or beginning of your video. So what lies over the horizon and how will payments look in the near future?

IoT Payments

Imagine being able to walk directly into a shop or a cafe, pick out what you want and just walk out again, without the need to check out. That is the direction that payments are heading thanks to wireless data and the Internet of Payments. 

Many of us now have wearable devices that monitor our physical activity, sleeping patterns, and health. But this is just the beginning. In 2019 alone, there were 126.1 million shipments of wearable technology devices –  that’s an awful lot of people walking around with a smart device on their wrists. 

IoT devices have enormous potential – from suggesting that you’re running low on milk and authorizing a payment as you walk out of the corner store, to monitoring a medical prescription and automatically ordering and paying for medications. These developments are known as ‘contextual payments’, and they can do everything from updating you on your electricity usage and paying the bill, to alerting you when items you want to buy go on sale and automatically purchasing when the price drops to a level you determine.

They can also integrate with voice assistants – imagine driving to work, making a list out loud of what you need to buy for dinner that night, then calling into a store on the way home where the items you need are already paid for and waiting for you – or simply delivered to your door. 

Omnichannel Payments

Omnichannel payments bridge the disconnect between the virtual and physical worlds, presenting a smooth consumer experience across your bricks and mortar store location, ecommerce environment, mobile apps, or even third-party seller platforms such as Amazon. 

This could lead to upsell opportunities with highly personal data-driven recommendations – and if something is out of stock in-store, it could simply be ordered online and delivered to the customer the next day. Customers are increasingly instigating this kind of multi-channel experience themselves – they expect to be able to access customer service on Facebook Messenger and have in-store staff know about it, for example. This method smooths over the cracks and makes the experience easy and intelligent to facilitate sales.

Voice Commerce

By 2022, it’s predicted that 55% of households in the US will have a smart speaker while 52% of all voice searches performed are information about deals, sales and promotions.

With its offer of exceptional convenience, this method of purchase is one that businesses need to quickly adopt. As search engines modify to optimize for voice, this will only become more widely adopted. Additionally, Paid voice search advertising could present a valuable opportunity for brands to position content promoting their products or services. Payments that work for voice commerce will be essential to completing the chain and generating voice commerce sales conversions.

The Rise Of Cryptocurrencies

For years now, cryptocurrencies such as Bitcoin have been floating around the edges of mainstream commerce, but now could be the time that they finally emerge on center stage.

Customers increasingly preferring to make purchases from their mobile devices. In fact, up to 73% percent of all transactions are set to be done on mobile by 2021. As digital payments rise in prominence, digital currencies could follow.  But the future of digital currencies might not be what many cryptocurrency enthusiasts expect. Britain, Japan, the European Union, Sweden, and Switzerland are banding together to consider use cases for issuing their own digital currency. China and the US are also eyeing digital currencies. A digital currency backed by central banks might give more consumers and businesses the confidence to finally embrace blockchain payments.  

The Rise of Alternative Payments

In many Western markets, such as the US, where only 6.5% of households lack a bank account, merchants have traditionally relied on the existing infrastructure of banks and credit cards. In countries with a far higher percentage of unbanked customers, fintech innovators have built solutions that circumvent banks and cards. 

For example, Africa boasts far more mobile phone users than bank account holders, which largely accounts for the success of M-Pesa, the dominant mobile payments provider developed by Vodafone. in 2007. In Central America and Mexico, it’s not uncommon for customers to pay cash for ecommerce purchases by copying a confirmation QR code from the site and taking it to a local convenience store where it can be scanned and processed via cash register. In many Southeast Asian countries super apps like Grab integrate their own digital wallets into their apps to enable consumers to effortlessly pay for their other services such as food delivery and ride-hailing. 

Now that innovations abroad have created payment solutions that work better for mobile-first consumers who require an easy and frictionless experience, these alternative payment methods are starting to gain momentum in markets where credit cards have traditionally dominated as well. The number of Americans who use mobile payment apps and digital wallets grew from 40% to 60% between 2015 and 2018. 

The Future of Payments is Digital

From contextual payments on wearable devices to the ability to pay with your voice to cryptos and alternative payments – All of these trends have one thing in common. They all represent the digitization of commerce. Brick and mortar, online and omnichannel retailers must embrace the payment methods their customers prefer and create payment experiences that seamlessly integrate digital technologies into frictionless shopping experiences.