As a sought-after speaker on financial markets and fintech, author Chris Skinner knows more than most about how consumers around the globe pay for things, but that doesn’t mean he’s never been caught off guard at the checkout counter.
Last year, Skinner arrived in Guangzhou, China, to discover that his hotel didn’t have a restaurant, or any food for that matter. Like most businesses in Guangzhou, the supermarket next door didn’t take credit cards, only cash and mobile payments. Nearby ATMs were uncooperative, and both popular Chinese mobile payment services, Alipay and WeChat Pay, required a Chinese bank account.
“So I starved for a day,” says Skinner, author of the books “Digital Bank,” “ValueWeb” and “Digital Human,” as well as the man behind the blog TheFinanser.com.
The use of digital payments continues to rise globally. By 2019, 2.1 billion consumers will have used a digital wallet—up 30 percent from 2017, according to Braintree’s 2018 Global Payments Report. And mobile apps and digital currencies are set to overtake credit and debit cards in 2019 as the most popular e-commerce payment methods worldwide, a recent United Nations report found.
Still, how consumers purchase goods and services—even in the digital realm—varies significantly from country to country, making even regional generalizations difficult.
The U.S. has seen slower implementation of mobile payments than many countries, with just $112 billion in 2016, by a Forrester Research estimate, while such payments in China totaled $9 trillion, according to iResearch Consulting Group, a Chinese firm.
“Across the globe, it’s almost a country-by-country evolution,” says Kevin Grieve, head of payments for Accenture North America.
Accenture’s “Driving the Future of Digital Payments Trends” report looks at where digital payments are headed. Here are four areas crucial to the e-commerce marketplace.
Filling up our digital wallets
Mobile payments got off to a slow start in the U.S., when Google Wallet introduced their mobile point-of-sale options in 2011. That said, the foundation had been laid, and Accenture believes mobile payments are at a tipping point in terms of growth. At least one company has already succeeded with a mobile wallet in the United States. PayPal, the most popular digital wallet on the planet, leads in the U.S. and now has more than 250 million active accounts globally. Moreover, U.S. mobile sales are expected to grow from roughly 40 percent of total e-commerce this year to 53.9 percent in 2021, according to Statista. “People are more and more comfortable with it,” says Grieve. “And it’s just more convenient. It’s about payments anywhere, anytime, safe and secure. That’s mainly what the industry is driving toward.”
The great vanishing act
Anyone who’s ever used Uber or Lyft knows that carefree feeling of hopping out of the car without having to dig for your credit card. Accenture expects this “seamlessness” trend to continue and to proliferate across the industry. Where you see it happening first is where there’s a high frequency of transactions—with ride services and companies like Starbucks and Amazon. But expect to see this more as merchants make aggressive moves to respond to what consumers want.
A rewarding experience
In a customer-centric business model, companies have to implement what Accenture calls the 4Rs: recognize me, remember me, make recommendations to me and reward me. One of the reasons that consumers accustomed to credit cards are slower to move to mobile payments is there’s nothing motivating them to change. “There has to be something that incentivizes people to change behaviors,” says Skinner. This is where rewards programs come in. Traditional rewards programs have been very transactional, offering one-size-fits-all benefits, more or less like cash. With digital payments, rewards can become more customized. In China, Skinner points out, a consumer with a smartphone in their pocket might walk by a store they often shop at and suddenly receive real-time discount offers, perhaps for something they’ve been researching. “You get the offer, which is brilliant, because you weren’t actually planning on going in the store that day—maybe you’re shopped out,” he says, “but now they’ve incentivized you to go in.” Moreover, merchants don't need to build their own program. With innovative payments platforms like Braintree, they can increase customer engagement by securely partnering with existing rewards programs or other value-add services.
To out-innovate a thief
Keeping payments safe and secure are crucial to building consumer trust, Braintree notes in a recent article. According to data released by information services company Experian, e-commerce fraud attacks in the U.S. were up more than 30 percent in 2017, compared with 2016. And 55 percent more consumers were more concerned about privacy in 2017 than 2016, according to global survey from the Centre for International Governance Innovation (CIGI) and Ipsos. The payments industry fixed a lot of the security issues in the offline world when it went to EMV chips cards. Now that the thieves have been locked out of the physical point of sale, they’ve shifted to online fraud and identity theft. “Fraud is a Whac-A-Mole game. They’re creative and innovative, and we have to stay ahead of them,” says Grieve. This means using the same type of technology online that chip cards use: “tokenism,” or a proxy number, rather than an account or credit card number. Additionally, expect to see more biometrics and other elements of security beyond simple passwords to make digital sales more secure.
In the fast evolving digital world, it’s not always easy to stay ahead of the trends. Payments platforms such as Braintree provide comprehensive, expert service that helps ecommerce merchants keep up with—and capitalize on—new developments in digital payments. Braintree’s constant innovation means you don’t need to worry about what’s coming next—you can focus on your core business.
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