Merchants must adapt to consumer demands to keep their customers. And more and more of these customers are millennials, who currently make up a quarter of the U.S. population. Millennials are tech-savvy, influential buyers who expect their purchasing experiences to be fast and efficient – and they are shaping the current and future payment landscape.
2017’s payment predictions reflect the ever-evolving, on-demand consumer who wants to browse, purchase, receive, and even re-order their goods in a seamless, timely, manner – and often via the click of a button. We will continue to see payments shift online with technologies such as digital wallets, on-demand apps, and increased connectivity through near field communications (NFC) and Bluetooth – all improving payment processes for consumers as well as driving significant behavior and societal trends.
1. Consumers will become more comfortable with mobile wallets and NFC
More consumers will realize the convenience of the fast, seamless payment experience that comes with mobile wallets and NFC technology. Slow to take off at first, many mobile payment apps had a great run in 2016. Apple Pay, with much hype around its debut, struggled with user adoption in late 2015 but is now reporting an increase of one million users per week.
We have also seen merchants like Walmart develop their own payment app – Walmart Pay – and they are seeing promising results, according to Walmart:
- 4 out of 5 customers would recommend using Walmart Pay
- 88% of transactions come from repeat customers
- 3 out of 4 customers have given Walmart Pay five-star rating
“There is something very powerful about the ease and simplicity of Walmart Pay,” said Daniel Eckert, senior vice president, services, Walmart U.S. “What’s even more powerful, though, is what this means for our customers. We want to make every day easier for busy families. We’re connecting all the parts of Walmart into one seamless shopping experience with great stores, easy pickup, fast delivery, frictionless checkout and apps and websites that are simple to use.”
Mobile payments are also shifting the way banks operate. In her recent Sleepless in 2017 article, PYMNTS.com’s Karen Webster explains that banks, once a traditional, brick-and-mortar business with your biggest competitor being the bank down the street, can now be found in the palm of the consumer’s hand.
“This shift is forcing traditional banks to not just amp up their mobile and digital game and rethink what it means to be a bank, who consumers now trust to deliver their banking services and what services they want and need from those providers. That will no doubt include a re-examination of how to leverage their assets and reputations as trusted guardians of their financial assets at the same time they harness new technologies and partner with innovators to bring banking into a mobile, digital age.”
The world was a little skeptical when Apple recently announced that the iPhone 7’s headphones were wireless, but the move on Apple’s part was a smooth one, nudging consumers in the way of using wireless more and increasing the adoption of Bluetooth along the way. As consumers increasingly use Bluetooth, they will become more adept using this technology in a mobile payments setting – a direction all merchants and consumers seem to be heading.
2. Consumers will adopt “on-demand” purchase types
Consumers’ desire for “on-demand” purchases will take hold of retail in 2017. In fact, two-day or even next-day shipping is becoming too long to wait for today’s consumers that want instant gratification.
“Consumers unwilling to wait in long lines will increasingly opt to use their smartphones to purchase products (or order ahead) before they even go to a store or while they are on their way, stated Scott Blum, VP and Lead Business Development, Marketing, for Total Merchant Services. “Location tracking connected to the smartphones will notify stores when consumers are near, so by the time the consumers arrive, their purchase will be ready for pickup – without the need to make a payment or wait in line. Small business merchants should expect to see new growth in 2017 as this on-demand approach takes hold of the industry.”
Amazon.com has set the standard for on-demand e-commerce, with fast delivery with invisible payments and many other perks that keep consumers coming back to its site. Expect Amazon to blaze the on-demand trail in 2017, with innovative offerings outside of their actual website including:
- “Amazon Go,” Amazon’s concept store, where people can pick up items without stopping to pay for them. Amazon Go automatically senses what customers are buying and charges their Amazon account, eliminating the physical checkout process.
- Dash technology, where Amazon consumers can reorder products with a push of a button on an appliance – GE, Samsung and Whirlpool are already working with this technology – or via a WIFI-enabled Dash button, where an array of products can be ordered with a single press. Amazon even refunds the full cost of the Dash button after its first use.
Merchants will continue to follow on-demand consumers by creating new apps for all sorts of services from dog walkers to ordering take-out to ride-sharing. These apps create the convenience our on-demand society craves, but also encourages a culture of sharing.
3. Consumers want Omni-channel shopping options – and beyond
Many of 2016’s payment predictions saw Omni-channel becoming a reality. Once merchants completed their migration to EMV and implemented advanced security measures, they could shift their focus to new differentiators, which included the ability for consumers to pay in multiple ways across different channels – in-store or online.
Moving into 2017, merchants will seek new ways to differentiate and provide value to their customers, with innovative technologies that go beyond just payment processing. Look for merchants to offer solutions surrounding loyalty and incentive programs, mobile wallets, on-demand offers, and push notifications to consumers in order to increase foot traffic and sales. Digital assistants are one way to do this:
“Imagine walking into your favorite big box retailer, and, based on your location and previous searches, your digital assistant knows where you are, what products you’re interested in and what direction you should go to get them. Not only do digital assistants effectively eliminate the need to consult with a sales associate, but they can also notify users of potential deals, offers and reviews.”
Keeping pace with today’s consumer is a large enough task for 2017 on its own, but with increasing reports on data breaches and cyber fraud, any business accepting brick and mortar and online payments will need to be knowledgeable on the best practices for keeping customer card data safe.
In Part 2 of 2017’s Payment Predictions next week, we will discuss the trends in cybersecurity, and the solutions that will help to keep your business, your brand and your customers safe from becoming the next victim of a data breach.