Consumers and businesses alike expect their payments to be secure, fast, and easy, and 2019 continued a trend of steady progress toward that goal. From mobile to AI to instant payments, it’s been a busy year full of exciting developments.
Let’s take a look back at some key takeaways from the year in payments.
1. Online payments are still going strong
Consumer adoption of online payments continues to grow, with increases across many categories, including recurring and automatic payments. Younger generations still lead the pack in frequency of online transactions, but boomers and seniors are increasing their use of this technology as well.
The mobile wallet continues to make inroads with shoppers. Three out of 10 shoppers now say they use mobile wallets for purchases, and almost half do their banking and make payments on their phones. Among younger users, this trend is even more pronounced—six in 10 millennials and Gen Zers are fans of mobile wallets, and nearly half of them use this method of payment several times a month.
2. Instant payments have found their footing
People want instant payments and use them more than ever before. In the past three years, the adoption rate has gone up fourfold, and 42 percent of workers have been paid this way in 2019, up from 11 percent in 2017.
Why the boom? Shoppers have a much better grasp of what they are and how they work. Eighty-two percent are familiar with instant payments, whereas just a year ago, only 60 percent claimed that. This is mainly because the average person now gets as many as 18 instant payments every year, amounting to a whopping $4.6 trillion.
Digital payment network Zelle is one example of this trend: It had impressive 2019 third-quarter results, with year-over-year payment values up by 58 percent. During that time, the company processed an impressive 196 million transactions amounting to $49 billion.
But payers still have some catching up to do. Though 42.2 percent of consumers received instant payments this year, 51.6 percent expressed a desire for this service.
3. Mobile continues to dominate
Mobile point-of-sale (mPOS) systems continued to be a driving force in payments, providing speed and flexibility to retailers. Your staff members no longer need to be tethered to a desktop terminal and can process transactions from anywhere in the store. This flexibility allows your teams to directly engage with customers, manage inventory, answer product questions, or reward loyal patrons with instant offers.
4. It was the year of debit
Shoppers have begun to migrate from credit to debit. At the end of 2018, the trend seemed to be moving in the other direction, with a slight inclination toward credit. But this year, the pendulum swung toward debit, across all generations and all types of businesses.
Why the shift? Ease of use (64 percent), convenience (62 percent), and comfort of use (51 percent). Another possible reason may be concerns about economic uncertainty, with credit card debt reaching new heights at the end of last year ($8,811 per household).
5. Mixed messages on security
Businesses have a renewed commitment to security, with increased adoption of standards such as point-to-point encryption (P2PE). However, the focus is not necessarily the same for consumers. In 2019, 60 percent said they valued convenience and ease of use over security, a change from last year, when 75 percent listed safety as the primary factor when choosing a payment method.
6. AI and ML have arrived
Artificial intelligence (AI) and machine learning (ML) have become essential payment enhancement tools for a growing number of businesses. They allow companies to improve the shopping experience by providing everything from special offers informed by purchase history and triggered by a customer’s location to personal digital assistants to faster checkouts.
AI also plays an important role in payment security, going toe to toe with hackers’ increasingly complex attempts at fraud by using algorithms and analytics to detect unusual patterns and root out unwanted purchases.
The biggest lesson we learned in 2019? A payment solution that’s built to evolve and embrace change is crucial to your business success in 2020 and beyond. Discover the power of unlimited growth with Poynt’s state-of-the-art open commerce platform, a powerful blend of hardware, software, and apps to take your company to new heights in the coming year.