Digital payments are becoming increasingly popular as customers increasingly rely on their smartphones to manage their money. Retailers respond by offering their customers a more seamless checkout experience – both online and in brick-and-mortar stores.
With platforms like Facebook, Instagram, Pinterest, and Snapchat that add more e-commerce features and lots of digital wallets built into loyalty programs, moving money from point A to point B has never been so easy. This trend will continue to accelerate, especially when voice payments, biometric authentication and cryptocurrencies gain acceptance among consumers.
These developments are among the trends that will have a profound impact on digital payments in the next 12 to 18 months. It is important for e-commerce companies to focus on payment methods that are most meaningful for their main customers.
Here are some of the biggest payment trends. Which will you implement?
All-In-One Super Apps
Digital payments are increasingly being integrated into online media platforms such as search engines and social networks, which are expanding e-commerce support to become all-inclusive super apps. The goal is to keep customers in a single app that handles a wider range of tasks, including integrated payments.
To get a better idea of how the market is developing, let’s take a look at WeChat, the messaging app from Chinese internet company Tencent. WeChat has moved away from its messaging roots and supports, among other things, “mini programs” for online shopping, bill payment, travel booking, ticketing and hailing to connect companies with customers.
WeChat’s role as a comprehensive “lifestyle hub” offers other technology companies interested in e-commerce a window into a possible future. For example, Facebook, which also includes Instagram, Messenger and WhatsApp, is in different phases to add payment support to its apps. YouTube is promoting more shopping experiences that are integrated into payments. Snapchat and Pinterest also offer more e-commerce support.
Switch to digital wallets
The popularity of WeChat and rival Alipay from e-commerce giant Alibaba has resulted in some parts of urban China becoming completely cashless and jumping into the modern age after years of underdevelopment. With the apps, consumers can not only process digital transactions, but also pay in stationary shops without cash or plastic cards.
US consumers have slowed down mobile payments, especially because plastic payment cards are trustworthy and easy to use. In addition, US companies have been investing heavily in infrastructure to support card payments for years. The continuing popularity of plastic cards has even prompted companies such as PayPal and Apple from Silicon Valley to offer cards to promote acceptance of their payment services.
However, younger millennials and generation Zers who are growing up are helping Driving adoption of digital payments, both online and at the point of sale in brick-and-mortar stores. Younger generations have grown up with smartphones for games, streaming media and social interactions. This familiarity with the technology leads to a higher acceptance of digital wallets, as young people learn to handle their own money.
Personalized experiences for digital payments
The expanded role of social media in e-commerce and the development of digital wallets are part of a broader trend to offer consumers more personalized experiences online and in stores. The retail environment is becoming more seamless as shoppers not only place orders for home delivery, but also visit stores to pick up orders or see products from clothing to electronics.
Letting customers shop whenever and wherever they want also means giving them the option to pay the way they want. Retailers have more ways to accept payments than ever before, so they can reduce checkout friction.
However, it is important to focus on payment methods that are most meaningful for customers. Payment methods available to merchants include PayPal, Apple Pay, Amazon Pay, Samsung Pay, Google Pay, Masterpass, and Visa Checkout. Instead of overwhelming consumers with dozens of different options, it is more effective to provide the most relevant ones.
Digital payments are also becoming more integrated into loyalty programs, allowing companies to develop rewards that are more important to their customers. A growing number of companies are creating mobile apps that allow customers to track points and track their progress toward rewards.
Voice assistants like Apple’s Siri and Amazon Alexa are now available on billions of devices, the most common being a smartphone. When consumers become familiar with voice-activated technology, they are more likely to use verbal commands to perform tasks such as making digital payments.
Voice commerce is still a novelty, but should not be underestimated as more and more companies develop apps that process voice commands for purchases and payments. Consumer acceptance of the technology will increase as more people equip their homes with smart home devices and feel more comfortable with these verbal interactions.
Amazon, which developed the voice-controlled assistant Alexa to power its smart home devices, found in a survey that 40% of consumers Expect to use voice commands as part of your shopping experience over the next three years. This path to purchase included not only researching products, but also the final purchase transaction.
Bank of America has invested a lot in the development of its bank Erica virtual assistant handle a wider range of services. Bank customers can interact with Erica using text or voice commands and perform tasks such as viewing invoices and scheduling payments. It is important for e-commerce companies to be prepared for the era of voice commerce that is becoming a reality.
Biometric technologies such as fingerprint scanning and face recognition are increasingly being integrated into digital payments as an authentication method. You can save time approving secure payments instead of forcing customers to re-enter credit card information or to remember a different password.
However, biometrics have also raised significant privacy concerns because the information is so personalized and immutable. While a consumer can cancel a payment card and order a new one because of suspicious, unauthorized fees, biometric information about fingerprints hardly changes over the course of a person’s life. It is important to protect this information, as data breach can be very costly.
In the coming year, digital payments will improve significantly given the increasing acceptance of newer payment methods by consumers. Payments are an integral part of the customer experience, ideally so smooth that customers don’t pay attention. While customers have more options for making digital payments than ever before, e-commerce companies should focus on payment methods that are most meaningful to their main customers.
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