Payment statistics confirm that consumer behaviors and their payment preferences have changed dramatically since the beginning of the pandemic. Consider these facts and figures that indicate the direction the industry is heading and what they can mean to your business.
The pandemic significantly accelerated contactless payment adoption in the U.S. Proximity mobile payments with cards or mobile wallets increased 29 percent in 2020. Driving the trends was consumers’ concern that touching cash or a PIN pad could make them more vulnerable to COVID-19.
Merchants need specific technology to accept contactless payments. For example, near-field communication (NFC) enables contactless payment cards to communicate with card readers, and many merchants purchased payment solutions with NFC technology when they upgraded to EMV technology. However, contactless payment acceptance is not automatic.
Help your clients configure their payment systems so they can provide their customers with the convenience of tap-and-go payments.
QR Code Payments
Some merchants have created touch-free customer experiences by leveraging QR code payments. For example, restaurants can print a QR code at the bottom of a customer’s receipt. Then, the customer can use a smartphone to scan the code and pay just as if they were paying for online orders. Payment statistics from Allied Market Research indicate the QR code payments market will grow from $8.07 billion in 2020 to $35.07 in 2030.
With the growth in this form of payment, particularly with payment statistics showing that adoption is strong with consumers 30 and younger, this is a capability you need to offer your clients. Speak with your point of sale (POS) vendor partner and your payments partner to ensure you can provide QR code payments to your clients.
Payment statistics for the unattended retail market are robust, with a CAGR of 7 percent through 2027, when the value should reach $46 billion. Consumer demand, which was strong before the pandemic, has increased due to health safety concerns. Self-checkout allows them to keep their distance from other shoppers and avoid speaking to cashiers or sales associates face-to-face to checkout. As pandemic concerns subside, unattended payment options will continue to give consumers a convenient way to check out with minimal wait.
Merchants often prefer working with one POS provider for all of their solutions. Therefore, to meet the demand for self-service and unattended payments, you may need to expand your offerings. Ensure your clients can manage self-checkouts and unattended payments from the same platform as the other transactions they accept. This will enable them to provide consistent customer experiences and simplify managing end-of-day reporting.
E-commerce Represents a Bigger Share of Retail Sales
The pandemic also drove huge gains in e-commerce. eMarketer reports U.S. online sales grew by 32.4 percent in 2020 and expects e-commerce to capture one-quarter of all retail sales by 2025.
Your clients who expanded their businesses online during the pandemic need your help to manage sales on multiple channels and accept their customers’ preferred payment types wherever they engage. Ensure you partner with a payments company with an omnichannel payments platform, so your clients have the capabilities they need, and they can manage payments easily from a single platform.
Cash is Still Relevant
According to the 2020 Diary of Consumer Payment Choice, U.S. consumers use payment cards for more than half of their payments. Cash, checks, and money orders account for only 25 percent of payments, and other types of transactions, such as ACH and wire transfers, account for the rest.
The CPO explains that although cash is no longer the most used form of payment, it still represents a large number of lower-value payments. For example, the average value of a cash payment in 2020 was $42 compared with $146 for all other types of payments.
Understanding how consumers make payments should inform the payments solutions you recommend to your clients. With few exceptions, businesses need a payment solution that enables them to accept debit and credit cards as well as cash. However, as a trusted advisor to your clients, you know that not every payment solution will give your clients all of the features, functionality, and security they need. Also, your clients who routinely process low-value transactions still need a secure and effective cash management solution.
Dig deep to understand your clients’ businesses and the types of payment transactions they process so you can implement a solution that meets their unique needs.
Most Payments are Digital
Notice again that the Diary of Consumer Payment Choice points out that consumers make most payment transactions with payment cards. And VARs and MSPs who provide payment processing solutions receive a percentage of those transactions.
Simply for illustration purposes, suppose merchants pay an average effective rate of about 4 percent of transaction amounts for card processing, and your clients on payment services bring in about $2 million a year in sales. About 30 percent of that payment goes to the VAR or MSP selling the solution. It seems like a small fraction, but 4 percent of $2 million is $80,000, and 30 percent of those payment processing fees is $24,000. That’s a payment statistic that’s worth paying attention to.
Are you getting your cut?