The COVID-19 vaccine is being distributed to Americans right now, and the US government is finalizing a second stimulus package – it looks like things are starting to trend upward as we head into 2021. 2020 is ending, and trends in payments have changed drastically. What 2021 payment trends should we be looking for?
More and more, we are seeing payment trends shift towards more independent and fluid options. Gone are the days when you had to run most or all of your payments through financial institutions – banks, credit unions, and the like. And as the payments game changes, it creates a lot of new opportunities and markets for businesses to take advantage of.
Digital Solutions Must Be Top Priority
Probably the single biggest impact COVID-19 has had on payment trends is the transition to contactless, frictionless experiences.
Because face-to-face interactions were discouraged and cash payments were not accepted at certain times during the early days of the pandemic, the Worldpay Global Payments Report 2020 projects a more than 10% increase in digital and mobile wallet use.
At the same time, credit and debit card use is projected to decline by nearly six and two percent, respectively.
Payment trends of 2021 and beyond will need to meet the demands of customers who want high levels of speed and customization in their financial transactions.
The payment trends with high speed will also likely include real-time payments or RTP. According to FortuneSoft, “this new buzzword in the payment world is gaining limelight due to its capability of providing speed, convenience, and security.” But what does the RTP of 2021 look like?
Primary features of RTP include real-time notifications for every transaction – confirmation messages, invoices, requests for payment, account statements, and much more. Additionally, real-time payment has built-in features running seamlessly behind the scenes. Some of these background functions include bill pay, insurance services, and e-invoicing.
The forces driving these RTP preferences include the growing global reliance on smartphones as a sort of all-knowing, all-capable device for every digital task. With the growth of P2P apps, social pay, and digital currencies, the payments industry will be defined by those businesses that can keep up with this demand for high-performing tech.
Much like real-time payments, cloud technology is on the rise due to its efficiency and high productivity. Hosting payments in the cloud is also very cost-effective.
With cloud computing, payments can be automated, e-invoices are sent in record time, and payments can be sent or received almost instantly.
Cloud-based solutions, though often mislabeled as security risks, are also much more secure than traditional data centers. As the technology evolves – aided in part by the onset of the coronavirus pandemic – many data centers are using cloud-based backups and authentication to halt cybersecurity threats.
Cloud computing examples include things like digital wallets, online payments and funds transfers, and online payment gateways: all things that have become much more integrated into everyday life since last spring.
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