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The last two years have been filled with disruption. Businesses everywhere adapted to shutdowns, shifted operations to a remote workforce, and renegotiated long-standing business processes. Several industries successfully navigated these drastic changes, and now the busy fourth quarter of 2021 is upon us all; and it will certainly give us a challenge. In early 2021, eMarketer projected that the holiday retail sales in 2021 will rise 2.7% to $1.093 trillion, while the season's ecommerce sales will rise 11.3% to $206.88 billion.
There were many ways B2B and B2C businesses adapted and survived to remain in business. The online payments landscape is continuing to diversify, and COVID-19 is the catalyst. Consumers have altered the way they pay online during COVID-19, and plan to make these changes permanent. Their transition is being influenced by reducing in-person payments and most consumers by this point have tried at least one new payment method online. Change is here and ‘Change before you have to’ is exactly the motto we should all be living by.
As we close 2021 with some smart (and maybe a little uncomfortable) changes, we need to take a closer look at the payment trends and models that will impact our bottom-line, health and even our sanity. We’ve identified some of the top payment trends in 2021 you will want to investigate soon.
Contactless Payments
In May of 2021, Mastercard found that more than 50% of U.S. shoppers now use contactless payments. 67% of merchants offer customers some form of contactless payment, per the National Retail Federation (NRF). With contactless payments, consumers can complete point of sale transactions using RFID or near-field communication (NFC) technology built into payment terminals and cards – eliminating the need to handle cash or pay. If your organization doesn’t already offer contactless payments, it should. Some may compromise on preference, but ordinarily do not budge when it comes to health and safety. J.P. Morgan Chase’s Vice President of card issuance, Rory Wilson, affirms that “consumers are much more conscious of the safety benefits of contactless payments” because of the pandemic.
Omni-Channel Payment Solutions
Regarding payments, omni-channel -- literally meaning multiple channels -- refers to the capacity to accept payments in a variety of ways while providing consistent convenience and/or service. For example, perhaps your business accepts orders over the phone, in-person point of sale transactions, and consumers can purchase via your eCommerce store. No one wants customers to drop their purchases because a physical self-serve checkout is difficult, or the online authentication process is time consuming. While the risks from fraud are persistent, it is evident that omni-channel payment B2C is here to stay and is rapidly becoming the B2B norm across multiple verticals outside retail, including hospitality and transportation. The post-pandemic model may differ between industries, but the omni-channel experience of customer interaction is here to stay.
Digital B2B Payments
More than three-quarters of Americans use some form of digital payment, which McKinsey and Company defines as any of the following: browser-based and in-app online purchases, in-store checkout using a mobile phone and/or QR code, and person-to-person payments. Penetration of digital payments reached 78 percent in 2020. Digital payments reduce sales abandonment rates and drive higher average transaction volumes across all consumer cohorts.
Businesses easily adopted B2B payment methods prior to 2020 - look for this trend to continue with more businesses accepting ACH, online credit card payments, and online debit payments. These payments are not only faster but more profitable because merchants benefit from Level 3 payment savings.
Online Payment Options
“Wise are those who modify” just might be the key B2B sentiment of the pandemic era. Modern business is changing the way B2B payments are made, automation is the compelling force behind how we get paid. Paper checks have been almost completely replaced by electronic transfers, but business-to-business payment options have been slightly slower to evolve. For those businesses who were still using paper-based Accounts Receivable and Accounts Payable processes mid-2020, the lack of online payment methods dramatically disrupted their remote workforce.
Online payment methods are secure and simplify back-end accounting processes, increasing efficiency and accuracy. Payments received from online payment solutions flow into business bank accounts without deviation. Additionally, many online payment solutions provide back-end office integrations that record the payments directly into an accounting system. Learn more about the REPAY ClickToPay Online Payment Portal to see how easy accepting online payments can be!
Mobile Payments
We just can’t get any more attached to our smartphones. According to Business Insider, currently, mobile apps are converting customers 157% more often than mobile website counterparts. What are mobile payments? Mobile payments are used by consumers to make purchases using their smartphone, tablet, or other mobile device. For example, consumers regularly make “in app” purchases using apps such as Uber, subscriptions, online games, or Starbucks. Mobile payments also include things like retail purchases using payment cards registered in their Apple Wallet or payments made using SMS payments.
Those that adopt mobile payments will ultimately thrive, not just survive these economic anomalies.
Faster Payments
The complexity and speed of our B2B world continues to escalate, increasing the priority for collecting payments in a faster, more reliable method. While ACH requires three days to complete, Same Day ACH (SDA) are processed in a single business day. Businesses will continue to invest in equipment and technology that helps facilitate these SDA payments.
Do you have questions about how you can stay up-to-date accepting payments in 2021 and beyond? Download the 2021 Payment Trends Whitepaper. For an award-winning payment processing platform that can mean the difference between satisfied customers and delighted ones, contact REPAY.