The Future of Contactless Payments is Already Here
How likely are you to use contactless payment while shopping? Are you concerned about making purchases with your phone? As a retailer, how can you better meet your customers' changing needs?
The economic landscape has changed how retailers and consumers interact. Here's the reality:
the global pandemic has forever changed in-store shopping experiences. Previously, many consumers were wary of making a purchase using a smartphone. Yet today, more consumers are embracing contactless payments, such as QR codes and digital wallets over traditional methods.
Changes in Consumer Behavior Necessitate Change
Adjusting to consumer behavioral changes is a top priority for retailers as they work to meet consumer needs, while also providing the latest payment options. According to a recent PYMNTS.com report done in collaboration with American Express, an estimated 57 percent of consumers prefer retailers that provide digital, contactless payment options. Six out of 10 merchants reported an increase in the number of consumers requesting contactless payments at checkout.
This marks a big shift in comfort with contactless types of payments. In 2019, 61 percent of consumers were concerned that checkout-free technology wouldn't charge them accurately. Additionally, only 28 percent said they were comfortable making a purchase at a checkout-free store, according to a Synchrony Digital Study.
"Throughout the last year, the rise of contactless payment usage and options has continued to increase," says Florin Arghirescu, Chief Product Officer, Synchrony. Consumers are becoming more comfortable with these payment options especially as access to these options increases. Businesses need to prioritize these technology advancements to meet consumer demand."
Contactless payment methods can also encourage more spending. According to the PYMNTS.com study, an estimated 69 percent of consumers who now use digital wallets are shopping more than they did previously.
The Rise of the QR Codes
Thanks to faster internet speeds and widespread smartphone adoption by consumers, using QR codes to order a meal from a restaurant or make a simple payment is now an immensely popular option for consumers - and a profitable one for businesses.
The global QR code payment market generated over $8 billion in 2020, according to a 2021 Allied Market Research report.The same study suggests this could grow to $35 billion by 2030.
Arghirescu notes, "QR codes had been moving at a fairly steady pace, but they have really taken off in the last year. QR codes are everywhere now! They're easy to use and safe -- which make them a big draw for both consumers and businesses."
As consumer behaviors and preferences continue to shift in a rapidly changing world, the convenience, safety, and ease-of-use of contactless payments will continue to win over customers and businesses. Retailers would be wise to follow the trends closely, adapt to these behaviors, and pivot as needed to meet consumers where they are.