Expert Roundup: How Are Mobile Payments Transforming? Part II
What a transaction looks like is rapidly evolving these days, and that’s true not just of the technologies that power the point of sale but also of the way brands and retailers are leveraging the point of sale to increase revenue, collect data, and differentiate themselves from the competition.
The Covid era has accelerated the trend as mobile payments piggybacked on broader inflections in e-commerce. Mobile wallets, BOPIS, and curbside pickup were all well suited to thrive amid Covid. Other technologies such as flexible payments and cashierless stores also benefited from the heightened consumer desire for convenience.
To define the current state and future trajectory of mobile payments, we’ve rounded up top industry voices and thought leaders. This is part of Street Fight’s new monthly ritual in which we tap our community to provide insights on each month’s editorial theme.
Continuing from Part I last week, below are the remaining insights we were able to gather from the community.
Kathryn Petralia, Co-founder, Kabbage, on Mobile Payments’ Table-Stakes Status
The pandemic amplified the need for digital payment solutions. Contactless and online transactions have become table stakes among so many small businesses, especially as more companies have transitioned to be online-only businesses.
Kabbage’s recent Small Business Recovery Report showed that out of 550 respondents, 22% of small businesses were always online-only stores, 16% have both a physical and online presence, and a considerable 15% completely shifted their company online due to the pandemic, eschewing their physical store.
Further, our first report showed 77% of small businesses are more open than ever to replace old systems to help their company run more efficiently and 33% intend to expand their digital operations. Providing businesses innovative and digital ways to pay and be paid will only become more imperative, particularly as last year saw a record number of new businesses begin.
Victor Ho, CEO & Co-Founder, Fivestars, on Payments in the Post-Covid Landscape
If the past year has taught us anything about retail, it’s that consumers still search for in-store shopping experiences and are eager to support local businesses if they can find convenient and safe options to buy. If small business merchants want to meet consumers’ demands in today’s post-pandemic landscape, they have to set their sights on modern and digitized payments.
While adopting these new trends, some merchants may find it overwhelming due to the plethora of options and advancements the pandemic has brought. In that case, I recommend choosing a system with intuitive user interfaces and contactless features to mold to the modern needs of your consumer base.
For example, businesses can integrate payments with marketing technologies. By combining CRM capabilities with payment tech, small businesses can get closer to competing with leaders in personalized shopping experiences like Amazon. Additionally, shopping small directly supports small businesses and local economies. It offers experiences shoppers can’t get online or through big-box retailers.
As brick-and-mortar retailers enter recovery, we’re hoping that small businesses, once wary of new technology, will now be eager to adopt digital-first solutions that can drive their bottom line and bring customers through their doors.
Vidya Peters, CMO, Marqeta, on the Transformed State of Payments
The pandemic has massively accelerated demand for contactless payments and safer alternatives to physical currency. We’ve also seen a rising demand for new, more flexible payment options like Buy Now, Pay Later services (such as Affirm, Klarna and Afterpay). These new trends have had a long time through the pandemic to take hold and will likely continue to dominate the payments landscape in 2021 and beyond. In recent years ,we’ve seen a rapid digitization of payments, and the Covid-19 pandemic pushed this trend past a critical mass.
Aside from these, consumer demand for tools that provide them with increased personalization and opportunity for control over their finances will continue to rise. We’ll likely see demand grow for prepaid digital payment methods that help with budgeting and prevent overspending as consumers move away from cash payments. We expect to see a lot of innovation in the credit card space, where there is a tremendous opportunity to deepen relationships with customers through more dynamic and customizable rewards and loyalty programs directly incorporated into the payment experience.
Another area of innovation could be crypto and the blockchain. So far, there has been far more hype than real-world use cases of cryptocurrencies in digital payments, but there’s potential for blockchain technology to become more mainstream as consumer demand grows. As more people look to pay for goods and services with crypto, banks and payment providers will have to evolve to meet rising demand. As with any other payment form, the need for real-time capability is a must, and supporting the blockchain could give companies an edge over the competition. We’ve seen early innovation from companies like Coinbase and Visa to allow cryptocurrencies to be spent at the point of sale and breakthroughs like this have a lot of potential.
Stay tuned for more expert roundups on next month’s editorial theme…