Running a successful business requires succeeding at a number of important steps. For starters, you need to pick the right product or service to provide. You also need to have the right marketing and advertising strategies in place to get the word out about your offerings.
Then there’s the all-important matter of getting paid. Decades ago, setting up the payment side of things was as simple as purchasing a cash register and writing up receipts. But it’s 2019, and we’re past the point when a simple cash register will do. There are more players and devices in the space and shoppers are increasingly adopting alternative payment methods to fit their lifestyles.
This year, we can expect some pretty exciting trends to shake up payment processing. Here are the top five we’re seeing:
Mobile payment adoption will continue to grow
Back in 2014, Apple introduced a much larger audience to the mobile wallet market. It wasn’t long before a number of other big names – including the likes of Google, Chase, and Samsung – followed suit. By 2015, there were nearly a dozen mobile-wallet platforms from which businesses could choose.
By 2017, 39% of U.S. consumers were already using smart wallets. And today, 10% of Millennialsreport using mobile wallets to make all of their payments and adoption is growing with other demographics, as well.
Some experts even believe mobile wallets will become one of the most important features consumers consider when buying smartphones.
This helps explain why mobile payment volume is expected to reach $503 billion by 2020. With just a year to go, it’s probably safe to assume that more and more customers will be taking out their phones at the cash register.
That’s why if you’re not considering mobile payments yet, it may be time to look into the technology. Do a bit of research into where your customers stand with mobile payments. Survey your shoppers to get their take on Apple Pay and other solutions. If you know other merchants that are accepting mobile payments, talk to them to see how things are working out.
Then once you’re willing to move forward, talk to your payment provider and inquire about their mobile payment solutions.
“Buy now, pay later” will become more popular
Modern consumers (particularly Millennials and Gen Z) are rapidly gravitating towards alternative payment methods.
One example? “buy now, pay later.” It’s a service that allows shoppers to immediately take home their purchase while paying for their products over a number of installments. “Buy now, pay later” has proven to be a boon for merchants (especially retailers) and consumers alike.
As retail expert Shelley Kohan notes:
With buy-now, wear-now, pay-later, the customer takes the product with them at the point of transaction and e-com goods are sent at the transaction point. The big win for retailers is they don’t have to figure out where to store layaway goods, deal with customers who change their minds and handle the mound of abandoned product.
As retailers and brands desire to capture the hearts, minds and wallets of millennial and Gen Z generations, understanding what drives their decision-making is critical. Connecting through a social cause, giving a voice in the development of a product and empowering customers with alternative interest-free payments that are convenient and simple to use are touchstones that resonate with the next gen.
What does this mean for you? If you’re a retailer selling high-ticket items, it may behoove to look into payment options such as “buy now, pay later.”
Remember, consumers want more flexibility with their payment options, and that’s not going to change anytime soon. If you’re unable to serve them in the ways that fit their lifestyle, they will likely turn to your competitors.
Zelle is moving right past Venmo
While Zelle and Venmo are primarily for peer-to-peer payments, it’s still a good idea to track trends in this space, as they may have some implications for your business.
Even though it debuted a decade ago, Venmo really only picked up steam over the past couple of years or so. People finally realized how easy it was to pay each other or split a bill in every cashless society.
Unfortunately, for Venmo, their rein didn’t last long. In just under a year, Zelle went from nonexistent toking of the payment-app-hill.
Like Venmo, it allows users to send money to someone else without using cash, wire transfers, or checks. So, what does Zelle bring to the table? In a sign that traditional financial institutions are finally “getting it”, Zelle was introduced by the country’s seven largest banks (Bank of America, Wells Fargo, JPMorgan, Capital One, US Bancorp, PNC, and BB&T).
That’s all well and good for consumers, but if you’re an SMB, why should this make the list of emerging payment-processing trends for 2019?
Here’s the thing: Zelle may be eying a move that would introduce its services to small businesses, making it easy – and secure – for them to accept payments through the app. Once that happens, it’s likely that Zelle will explode in popularity.
Obviously, nothing is set in stone yet, but we highly recommend that you watch this space. You want to be prepared from when either Zeller or Venmo decides to make bigger moves towards the SMB space.
Payment security systems continue to evolve
As we just touched on, security is always a concern when it comes to disruptive technology.
However, security measures can be a disruption in and of themselves, too.
One example to look for in 2019 is biometric authentication (e.g. using fingerprint IDs to validate transactions).
While the idea may seem a bit far-fetched to some, it’s estimated that biometric authentication will support over 18 billion payments by 2021. That will mean a noticeable expansion of the technology – and perhaps even consumer demand for it – in 2019.
Keep an eye out for this trend — as well as other security issues — in the coming months. As we mentioned before, falling victim to fraud doesn’t just damage your finances, it erodes customer trust and could kill your reputation.
Acting on these important trends
Though adopting some of these trends may represent a major change to your company’s current operations, there’s still plenty of time to start the process. Pick one of the five above and then take the first step toward keeping up.