The uptick in the number of payment processing companies is no coincidence. While it may seem trivial, payment processing will define the consumer experience in the years to come. Indeed, how we conduct transactions has a significant effect on the entire process.
Technology, for the most part, is what drives this entire process. And as technology gets more and more advanced, so too will payment processing. With that being said, 2021 has a lot in store when it comes to payment processing.
To help you navigate this industry, we’ve put together our picks for the top trends to take note of in 2021. For context, we’ve also included a brief discussion on the importance of payment processing and how it has an effect that goes beyond consumer convenience.
Importance Of Payment Processing
So what real effects do optimized payment processes offer for businesses? This is a question one has to answer, as businesses may have to shell out resources in order to accommodate these new means of payment.
If you really look at the current state of the world, the importance of payment processing is crystal clear. So much so that getting a payment processor for small businesses and accommodating the multitude of payment processing options are more than justified especially for businesses who offer high risk merchant services and even for those with small scale operations.
1. Rise Of E-Commerce
The rise of the e-commerce industry and its trajectory to shift the power balance away from physical stores has been pretty evident in recent years. And with the global pandemic speeding up this shift by around five years, it’s safe to say that e-commerce is the inevitable future of shopping.
Now, one key element of e-commerce and online shopping is payment processing. And with the multiple industries trending towards the direction of e-commerce, the importance of secure and reliable payment processing cannot be understated.
Without payment processing companies and proper payment processing tools, e-commerce would not be as successful as it has been. It’s what makes the whole process easy and convenient, which is basically the entire point of the e-commerce and online shopping industry.
It goes without saying that your company, no matter how big or small, will need to dip your toes into e-commerce in order to keep up with the rest of the world. This is why you also have to keep up with payment processing trends, as they will be vital when it comes to the future of your company.
2. Higher Sales
Giving consumers more options that are convenient when it comes to paying for products is a great way to drive up sales. This has to do with the entire consumer experience and how payment processing could greatly improve it.
The user experience (UX), which is how you craft and optimize the consumer’s experience, such as how they interact with your site or app, can positively (or in some cases negatively) affect how they perceive your company or brand.
The last thing you want is to give your potential market base a difficult time when they already want to buy your products or services. Innovations in payment processing and transformative payment processing companies ensure that everything is just a click away.
3. More Options
They say that variety is the spice of life. Coincidentally, the same can be said about payment options. As mundane as that may sound, accommodating how consumers want to pay can only benefit your company or business.
And with more and more payment processing options and companies popping up, it’ll be best for the overall customer experience to give them multiple options to pay. This can lead to more sales, as well as new customers.
Little things like this go a long way when it comes to gaining customers. Allocating both effort and resources towards accommodating them shows them that you care — that they matter.
While this may seem insignificant, this could be the determining factor on whether or not a potential customer does business with you or takes their money somewhere else. Keep this in mind, when making decisions regarding payment processing companies and tools.
Trends In Payment Processing
Innovations in payment processing are evolving with technological advancements. And considering the rate that it’s going, it’s safe to assume that payment processing will be vastly different in 2021. This is amplified by the fact that millennials tend to be averse to using credit cards.
With that being said, it’s time to take a closer look at the future of payment processing. What trends can you expect in the coming year and how will these trends affect both businesses and consumers.
1. Artificial Intelligence
Artificial intelligence (AI) is a driving force when it comes to innovation. Multiple industries have begun integrating AI to propel themselves further into the future. Payment processing isn’t exempt from this, as more payment processing companies explore the possibilities with AI.
One way that AI is innovating payment processing is fraud detection. Companies such as Bleckwen have used AI and machine learning to detect anomalous transactions by integrating the AI with the client’s databases.
And while it may not seem like a big deal, it’s important to note that billions are lost in payment fraud annually. In fact, the United States alone accounted for $9.47 billion in losses back in 2018. This is a long-standing issue that may soon be resolved in the very near future.
2. Near Field Communication
While e-commerce is a huge factor when it comes to payment processing, this doesn’t mean that the innovations are strictly limited to the digital space. Near Field Communication (NFC) could very well upend how we purchase things in the real world.
The concept behind NFC is simple, it’s paying by waving or tapping your mobile device. This makes for smoother and more efficient transactions. This also makes for more secure transactions, as businesses will no longer have to handle credit cards.
Certain industries are ripe for this kind of innovation. Transportation could greatly benefit from this, as all you would need to pay for a bus or a train is your smartphone. This will make things more convenient for both the consumer and the service provider, creating a true win-win situation.
The global pandemic has already shown how useful contactless transactions can be. Indeed, payment processing companies have only scratched the surface of what this technology can be. And given its current trajectory, it’s safe to say that this may be part of our new normal.
We’ve all been a witness to how fast Venmo has grown over the years, as it now generates billions in revenue. Indeed, peer-to-peer transactions have been one of the leaders when it comes to payment processing in the modern age.
Not only does it let consumers make cashless transactions but it also allows them to split bills and send money to other individuals with one press of a button. It’s safe to say that these apps have made life infinitely easier.
Now that peer-to-peer payment processing has been integrated into daily life, it’s safe to say that businesses will start utilizing them in transactions as well. The possibilities are pretty much limitless when it comes to this type of technology, so it’s worth keeping an eye on in the coming year.
4. Buy Now Pay Later
As we’ve previously mentioned, the current crop of younger consumers is pretty averse to the use of credit cards. Due to this, they’ve explored other payment options. One option that’s been gaining tractions is the Buy Now Pay Later model.
Now, one common misconception about this process is that it’s limited to expensive or premium products. This just isn’t the case. Retailers such as Nordstrom and Sephora are allowing customers to pay for products in installment.
Due to its popularity, it’s safe to expect more businesses, both physical and digital, to make use of this payment processing method. It not only gives consumers more options but also makes a business more flexible when it comes to payment methods.
5. Frictionless Payment
Lastly, one trend that will surely be integrated into most businesses in the near future is frictionless payment. It’s a no brainer that many consumers highly value convenience. The last thing they want is to have to jump through multiple hoops just to purchase a product or service.
Other than giving consumers more options, payment processing companies also aim to make the process as convenient as possible. Convenience could be the deciding factor on whether or not someone does business with you or takes it somewhere else.
This is why focusing on improving the customer experience as a whole will be the top priority for many businesses moving forward. This is especially true for e-commerce platforms, as they can optimize their apps and sites for easy and stress-free payment options.
We hope that you picked up some important information on the future of payment processing. If something was unclear or if we missed anything, do let us know in the comments below!