The events of 2020, including stay-at-home orders and economic shutdowns have driven dramatic changes in how shoppers make purchases and how merchants do business. While the pandemic continues and new consumer habits take hold, ISVs and their channels should pay close attention to these payment trends that will continue into 2021.
Omnichannel, Finally
The retail industry had reached the point a few years ago where the term “omnichannel” was so overused that it nearly lost its meaning. Avoiding the word continued – until 2021. Out of necessity, retailers, restaurateurs and other merchants are finally achieving consistent brand experiences in person, online, via mobile app, on social media, at a kiosk or any other way customers choose to engage.
With many purchases starting on a digital channel and ending with in-person experiences, merchants are finally grasping the importance of seamlessly merging the two worlds to offer the types of experiences their customers want. They’re also using their new omnichannel systems to collect and analyze data from all types of engagements to build a true picture of their businesses and to understand their customers better.
In-demand omnichannel solution features include ways to keep customers connected, whether placing a mobile order, ordering for curbside pickup or buying online and picking up inside the store or restaurant.
ISVs and VARs enabling their clients to create omnichannel experiences need to ensure they are also offering a full-featured integrated payment solution that allows consumers to make purchases using their preferred payment methods on any channel.
Touchless Payments
Data shows the pandemic accelerated contactless payment use in the U.S; for example, Mastercard reported a 40 percent in contactless payments in Q12020. Furthermore, National Retail Federation (NRF) research shows that 94 percent of retailers believe that contactless payments will continue into 2021.
In addition to consumers using mobile wallets to make contactless payments, expect more to use contactless cards as issuers get their plans to upgrade cards back on track in 2021. This is an important milestone: The more consumers that have contactless cards in their wallets, the greater the expectation that merchants will have the ability to accept them.
Some merchants, especially small and medium-size businesses that are just upgrading from a nonintegrated payment terminal, may be looking for quicker ways to provide “contactless” payment experiences during the pandemic. These merchants may benefit from offering QR code or text-to-pay solutions that enable their customers to pay via a link to an online payments page.
Self-Service
As retailers and restaurateurs adapted their operations to conform with health safety guidelines, there has been some question of whether consumers would use self-service kiosks that other people had touched. However, with CDC guidance now suggesting that the bigger risk is close contact with someone who has COVID-19 for 15 minutes or more – consumers are avoiding lines and choosing self-checkout options. Additionally, to ensure shoppers’ safety, merchants are disinfecting kiosks between use and making hand sanitizer available.
The ISV’s or VAR’s role is to ensure that the payment solution the merchant is using supports secure, easy-to-use unattended payment options.
New Payment Trends on the Horizon
Payment trends in 2021 won’t only reflect evolving consumer behaviors due to the coronavirus pandemic. Technology advances will also drive new payment trends, including:
- Biometric authentication
An emerging payment trend is minimizing card-present or unattended payments fraud with biometric authentication. Fingerprint ID has become familiar to many consumers who use it to unlock their phones or verify their ID at a healthcare provider’s office.
In addition to fingerprint ID, in 2021, expect facial recognition to trend as an authentication method. For example, a PopID kiosk solution deployed at Daddy’s Chicken Shack in California uses facial recognition to update or redeem loyalty points and pay at any of the restaurant’s locations using tokenized cardholder data – and to create a frictionless customer experience. - Banking apps
Traditionally cash-only customers have been at a disadvantage this year, but banking apps are giving students and others without bank accounts digital payment functionality. These apps offer features such as person-to-person fund transfers, payday advances and cryptocurrency accounts, as well as debit card and mobile wallet functionality. - Artificial intelligence
Payment solutions leveraging artificial intelligence (AI) will also trend in 2021, giving payment companies greater ability to secure data and detect fraud. AI will also move to the forefront for its ability to deliver enhanced customer experiences, for example, AI computer vision enabling cashierless checkout.
Flexibility is the Key for the New Year
Optimistically, the pandemic will subside in 2021, probably driving some consumers back to old habits. However, some will continue to take advantage of new retail and restaurant operations due to their convenience and personalized service.
ISVs and VARs need to prepare their clients for either circumstance, including using a modern payment platform that gives them options and enables them to create the types of engagements their customers want.
