Payment Trends Shaping Businesses of All Sizes
During the 1970s, financial transactions were primarily conducted using cash or checks, with payments processed manually. Since then, near field communication (NFC) contactless payments, and other forms of cashless financial transactions have brought about a digital payment revolution. This development is advantageous for consumers who enjoy greater convenience with shopping, bill payment, and other financial activities, whether from home or brick-and-mortar establishments. Small business owners also benefit, thanks to advances in technology that eliminate the need for large-scale volume to enable customized payment services while at the same time reducing the risk of unauthorized or fraudulent transactions.
A Short History of Payments and Financial Transactions
In previous decades, signs declaring “We Take Checks” were a welcome sight to many consumers wary of carrying large amounts of cash. Beginning in the 1970s, ATMs replicated or replaced many of the functions of human tellers with the added advantage of 24/7 availability. By the 1990s, flat currency and checks had begun to give way to remote payments. Point of sale (POS) payment terminals became more common everywhere, from mainline retail and financial establishments to smaller businesses and even businesses without a permanent physical location.
21st Century Financial Transaction Trends
Technology supporting payments and financial transactions has continued to advance in the 21st Century. Mobile wallets and apps are replacing physical wallets stuffed with plastic and cash. Some establishments have begun to reject cash payments altogether.
COVID-19 had a profound impact on many aspects of consumer behavior. According to a 2022 report by Global Payments, as of March 2020, card-not-present transactions outnumbered those with the card present and have not returned to pre-pandemic levels. The same report showed that 39 percent of consumers reported shopping by smartphone at least weekly, with 23 percent shopping online every day, often using virtual cards, mobile wallets, and payment apps.
While many of these transactions are made by consumers shopping from home, contactless payments are increasingly common, even when in-person transactions are involved. QR codes and portable payment terminals equipped with near field communication (NFC) technology allow consumers to use QR codes or tap-to-pay so that their credit and debit cards never leave their possession.
Security is always a concern with online, virtual, and NFC transactions. Fortunately, technology has advanced in that aspect as well. For example, tokenization separates personally identifiable information from transaction-related data, while blockchains allow secure transactions without third-party involvement.
Staying Abreast of Consumer Payment Trends
With technology changing so rapidly, it can be hard to keep up with the latest payment trends. Understanding the variables of change pertaining to consumer payment preferences can help you choose which payment tech is best for your customers. Contact PayTech Trust for more information on how we can help.
PayTech Trust offers secure merchant accounts and online credit card processing for businesses of all sizes. With our collaborative suite of services and best practices to integrate new payment trends, PayTech Trust has the experience and the expertise no business can afford to do without. Contact Our Sales Advisors