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Today’s Consumers Are Changing The Payment Industry

Take a moment and look around you. Look around the places where you live and work. Look around your cars, the parking garage, the places where you shop and dine. Think about how you interact with all of these places. Chances are, those interactions are no longer traditional, instead you have smart parking spaces, interactive and connected appliances, and an ever-growing catalog of “tailored for me” experiences.

As consumers have started to rely more heavily on their smart devices to do everything from start their car, to pay their bills and control their household electronics, industries have had to adapt to keep up. People are attached to their devices, and increasingly have more and more real-time access to information that allows them to navigate the physical and digital world through a single point of contact – their smart device. According to a report compiled by the Pew Research Center in January of 2017, 77 percent of Americans own a smartphone. Broken down further, 92 percent of Americans between the ages of 18-29 and 88 percent between the ages of 30-49 use a smartphone. As those numbers continue to grow, speed, convenience and friction-less interactions continue to be top expectations of today’s customer. That means those same expectations should be a necessity for businesses, both small and large, in order to fully realize the potential of the dynamic consumer marketplace.

THE MODERN SMALL BUSINESS

Operating as a small business (SMB) in this active marketplace is certainly different than 10, or even five years ago. We are living in an age where there are multiple options for commerce, whether it’s digital, physical or blended omni-commerce. The quest for the consumer’s dollar has reached a feverish pitch, further fueling competition across the SMB spectrum requiring businesses, no matter their size, to be nimble and flexible in their sales format.

Today’s SMB is faced with a dynamic and expanded consumer base that’s been opened up by omni-commerce channels. For the modern SMB, digital and physical real estate consideration must be given to alternative or new payment checkout options including digital wallets; market entrance from China Union Pay, AliPay; and checkout button additions from Chase, Amazon and Google.

SMBs must also embrace biometric safeguards for their credit card processing in order to remain competitive with larger businesses. As biometric authentication continues to become part of everyday experiences through smart devices, loyalty apps and banking, it’s putting pressure on other parts of the business ecosystem to deliver similar experiences and, if nothing else, to be just as fast and secure with the payments experience.

 THE PAYMENTS EVOLUTION

The payment industry, as a whole, is in the height of an evolution. Companies that offer merchant platforms, along with others in the retail sector, are actively jockeying to be a one-stop-shop for businesses of all sizes. Within the industry, we expect to see more consolidation of traditional payment providers, along with a combining of these providers with technology focused platforms. Hybrid card and cash injection options will pick up steam as these players try to win in a saturated space. An in-depth understanding of the consumer will be among the catalyst for delivering on these strategic moves to win in connected commerce. In the last year alone, we’ve seen this type of strategic alignment among those in the payments and tech industry. In May, First Data announced the purchase of CardConnect, a payment processor and technology solutions provider, for $750 million. In July, Mastercard announced an agreement to acquire Brighterion, Inc, a company focused on artificial intelligence, for an undisclosed amount of money.

MOBILIZING MERCHANTS: TODAY AND BEYOND

Today’s consumers are complex, and understanding their engagement preferences, spending habits, desire for convenience and the need for “tailored for me” experiences will ultimately be the keys for success for any business. As merchants, it is important to participate in the shift happening in the ecosystem and to influence the behavioral changes, especially when it comes to payments. Soon credit card and loyalty card roulette will be a thing of the past, and smart default payment methods, along with financial and loyalty recommendations driven by AI, will influence content and checkout speed. Did you know that, according to NFC World, global mobile NFC expenditures will be around $40 billion in 2017, and by 2020, that number spikes to $155 billion? As a business, you need to be prepared for the payments evolution in order to deliver a compelling and rewarding consumer journey, encouraging return visits. When you do this, you’ll reap the rewards.

The new reality is SMBs need to tailor the customer experience to the individual, being prepared for what preferences they might have, and being able to accept/accommodate their needs and all payment interactions. As the payments industry moves through these times of change, one can’t help but look to the future and see the multitude of options that consumers will have to control the payment experience via their personal devices. Biometric security measures, voice/digital assistants and the ultimate personalization all reside within this vehicle to the world – the smart device. So, let’s go forward and harness the power of connected commerce.

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