Payment trends that are changing the way we shop


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Think about making a purchase was like several decades ago. A cashier would ring up the total for your purchase and you’d open up your wallet and pull out a lump of cash.

Today? Things look quite a bit different.

Of course, the core premise of payments hasn’t changed—you’re still exchanging a sum of money for a good or service. However, the method we use to make these payments has evolved.

Contactless payments are one of many examples of how the payment landscape is constantly shifting. Retailers and business owners will need to rise to the challenge and keep up if they want to remain relevant and competitive.


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What is a contactless payment?

With a standard payment, there’s physical contact between a payment method and the point of sale terminal—like when your credit card is swiped or inserted into a card reader, for example.

As the name implies, contactless payments don’t require any of that physical interaction. These types of payments typically fall into two broad categories: a contactless credit card or mobile pay.

Some debit and credit card companies are issuing contactless cards that a shopper only needs to wave above a contactless card reader—eliminating the physical contact that’s typically required for a credit card purchase.

While these types of cards aren’t widely-used yet (more on that later), they are on the rise. Visa CEO, Alfred Kelly, estimated that up to 100 million contactless Visa cards could be issued by member banks in the United States during 2019.

However, a more prevalent form of contactless payments are done using mobile pay or tap to pay options.

Things like Apple Pay, Samsung Pay, and Android Pay give users the options to setup digital wallets and pay retailers by holding their smartphones near contactless readers or payment terminals when instructed.

The future of payments: 3 trends that are already here

Try to think of the last time you saw someone counting out change to pay at a register, and it’s obvious that consumers expectations for how they’ll make payments has changed dramatically over the years.

But what payment trends do you as a business owner needs to be aware of? Here are three major ones that are greatly impacting the way we all shop and spend.

1. Convenience and user experience are paramount

When it comes to payment technologies, there are a lot of factors that are contributing to these changes. There’s consumer wariness around growing credit card fraud and constantly-evolving payment regulations that require a certain amount of transparency and security.

But perhaps the biggest driver behind the move toward contactless payments is the consumer demand for increased convenience and streamlined shopping options.

Look at the popularity of things like Amazon Prime (with over 100 million subscribers) or grocery delivery services. We want it, we want it now, and we don’t want to have to dig into our pockets for spare bills and quarters to make it happen.

This emphasis on ease and convenience is only gaining steam as the younger generations of digital natives join the ranks of shoppers. They’ve grown up with these types of amenities, and they’ve come to expect them in nearly all of their interactions.

That’s why they’re the ones who are quite literally driving the future of payments—particularly when it comes to using mobile technologies.

An estimated 70% of Generation Z consumers made an in-app mobile payment in the year 2017. And they’re a demographic that can’t be ignored. This generation is predicted to make up 40% of consumers by the year 2020.

Additionally, shoppers expect to be able to make payments anytime, anywhere. Gone are the days when a consumer was expected to visit your brick and mortar location in order to use a credit card.

With mobile card readers and money-sharing platforms like Venmo, today’s payments are device enabled rather than location bound. That means shoppers anticipate being able to complete their purchases right now.

2. Consumers are increasingly concerned about security

Along with advancing technologies comes increasing concerns about the security and protection of our private information.

Credit card fraud, in particular, has seen a steady uptick. The financial industry projected that we reached $31.3 billion in global card losses in the year 2018. A good portion of credit card fraud was happening via skimming—where fraudsters could steal your card information when you’d insert it into a reader.

That’s why most financial institutions have moved to EMV cards (also known as chip cards), which are much harder to clone or steal.

But even so, that was all enough to make consumers wary of that widely-accepted form of payment. One Bankrate survey estimates that only 33% of Millennials actually have a major credit card.

That’s pushing consumers—particularly those in younger generations—to payment forms that seem more secure, such as mobile wallets.

With an increase in biometrics for payment authentication, mobile options often require things like fingerprint scans or facial recognition to grant access to payment methods, which adds an extra layer of security.

Contactless cards also amp up the protection. As Mastercard explains about their own cards, contactless payments require different information. That means that sensitive details like the cardholder’s name, security code, or billing zip code are never actually transmitted.

The United States has been slower to adopt contactless cards and payment methods (while being outpaced by countries like China, the UK, and India), they’re certainly predicted to rise rapidly—and maybe even become our new normal.

3. ‘Invisible payments’ are gaining traction

For consumers, the easiest way to pay for something is to not pay for it at all. No, that doesn’t mean they’re walking away with items for free. Instead, the greatest convenience comes from not having to worry about fumbling for their payment method in the first place.

One common example? Think of the last time you took a ride in an Uber. You didn’t even think about paying as you slid out of that backseat—payment happened completely behind the scenes. Or, maybe you experienced this when you picked up your mobile order at Starbucks and didn’t think twice about paying for your beverage.

These are coined as “invisible payments.” Technically, they’re contactless (as there’s no physical interaction happening), and they represent the ultimate level of convenience for shoppers, which means they’ll undoubtedly see increased usage moving forward.

One study from Juniper Research predicts that “invisible payment” technologies will process over $78 billion in transactions by the year 2022—a pretty significant increase over the estimated $9.8 billion in 2017.

Contactless payments are here to stay

The payment landscape is changing, and we’ll likely never move backward and return to cash and checks. Given increased demands for convenience and security, contactless payments will keep advancing and shaping the future.

As for you and your business? You’ll need to keep up with these expectations.

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This article originally appeared on the QuickBooks Resource Center and was syndicated by

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