The Covid-19 pandemic changed how people shop, with many now favoring online payments over cash. But it’s not only consumers changing how they operate; global companies have also undergone their own mini-renaissance in accepting payments for their goods or services.
Innovative payment technologies have been part of daily life for a while in the developed world, with emerging markets catching up fast. For the past decade, at least, the way people shop has changed dramatically, mainly due to the internet connecting them no matter where in the world they’re located. As commercial borders and barriers become extinct, consumers can make payments from anywhere, in their local currency, using a suitable and convenient payment method. The fact is that digital banking and online payments are the future. A recent report in the Independent claimed that cash “will be used for just 7% of in-store purchases by 2024” in the UK.
Let’s take a closer look at how the Covid-19 pandemic is reshaping the future of online payments and how these trends will affect the way everyone shops.
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Record-breaking mobile transactions
As a response to the global pandemic, businesses worldwide needed to adapt fast to the new reality on the ground. Due to government-mandated lockdowns, millions of people from Southeast Asia to London and just about everywhere in between were forced to stay home, which meant shopping from home. According to a recent report, 79% of online purchases were made via mobile devices in the past six months alone. The report also noted that mobile apps are set to increase in popularity over internet browsers for completing payments in the not-too-distant future. The fact that many experts now refer to ‘mCommerce’ instead of ‘eCommerce,’ with the M standing for mobile, says it all about where the market for online payments is expected to go.
Contactless payments are increasing
One of the many lessons learned from the pandemic was that alternative payment methods are favored by customers and merchants alike, both of which benefit greatly by not having to endure the issues that come with cash-based transactions. In addition to being low-cost and seamless to deploy, digital payment methods are expected to outpace cash before long, while contactless payments are a great way to help small businesses enter the online payment economy. In a bid to slow the spread of the virus, and based on World Health Organization advice, large numbers of Southeast Asian consumers moved to contactless payment methods in 2020. Digital wallets (eWallets), mobile applications, and contactless cards have fueled the growth of digital payments so rapidly that they have overtaken the use of debit and even credit cards as the world steadily moves away from cash, seemingly once and for all.
More QR code payments
As the pandemic meant that consumers around the world preferred to steer clear of cash in 2020, many customers (depending on their region and location) found themselves searching for the right alternative payment methods for them. QR code payments became more popular in the past year, especially across parts of SEA and China, among other places, as customers opted not to touch menus at restaurants or POS (Point-of-Service) terminals at stores. Consumers in countries like China have been paying with QR codes for years. Since the pandemic began, QR codes have been used across the board since they enable consumers to use their mobile devices. Naturally, companies worldwide don’t want to miss out on potential business, and that’s the reason why more and more leading hospitality and big chain brands are offering QR code payment facilities to their customers. The other unique feature of QR code technology is that it is not limited just to making payments. Customers can often view menus, place orders, or unlock things like rental bikes and electric scooters, all 100% contactless.
Biometric banking and payments
For biometric payments, the future looks promising indeed. With people becoming more accustomed to using biometric data to identify themselves, we can expect fingerprints, iris scans, facial recognition, and other methods to become way more commonplace for online and in-store purchases in the near future. International travelers and those in security positions are no strangers to biometric recognition as part of their daily routine. When it comes to banking, many folks are used to the enhanced security that biometric technology brings. Such banking systems use technology that replaces unsecured and outdated verification methods such as PIN numbers, ID cards, or passwords. Possibly the best thing about this technology is the all-around convenience it provides. Another vital advantage is that at least 50% of consumers questioned said they would prefer to use biometric cards for online transactions over entering a PIN number or other form of POS identification.
Minimizing payment integration
One of the main drivers for 2020 was that global companies needed to mobilize their resources fast and react promptly to the new reality that was unfolding as a result of the pandemic. As well as moving increasingly towards contactless payments where possible, many businesses urgently needed to reduce costs, and one way to do that was through finding companies like Zotapay (Zota), which offer a ‘One Application, One Integration’ model. This saves the time and hassle of connecting with five or more online payment systems concurrently, spanning numerous regions or various payment methods. With an all-in-one payment solution, businesses can reduce expenses and minimize technical debt. SaaS subscriptions can be made cheaper with the right platform by enabling access to additional payment methods and local acquiring banks in cross-border markets.
The future of online payments
For better or worse, the pandemic has shown how robust and flexible the online payments industry is as a whole. The past very challenging year proved just how well global companies adapted to the new reality, reinventing their business models and facilities to accommodate the needs of consumers. At the same time, the way people shop online has changed, even though understanding the precise nuances of those changes will take some time to be seen fully.
Zotapay (Zota) helps global companies to deploy gold-standard online payment solutions, enabling them to pivot and adjust to any situation. For more information about our range of services, get in touch!