While modes of payment vary throughout the world, both merchants and consumers share a fundamental goal: They want fast, convenient and secure payment methods, no matter where, when or how they are transacting. The question for retailers is which forms of payment they should be embracing now.
To help, here are six payment opportunities that merchants should consider to keep attracting customers to their stores.
1. Contactless Payments
Fueled by the pandemic, technology trends like mobile contactless payments have grown in popularity. In fact, 92% of merchants surveyed globally report they already accept or plan to accept contactless payments within the next 12 months. Of those surveyed, 85% stated that acceptance of contactless payments has improved customer satisfaction, with 78% saying acceptance of contactless payments has decreased average transaction times.1Not only do contactless payments enhance the shopping experience through increased efficiency, but 45% of respondents to a global consumer survey said they prefer contactless payments to cash.1Moreover, 82% of merchants surveyed globally reported contactless payments, including tap and pay, are one of their most popular payment types and were an essential part of their response to the pandemic.1
Secure Remote Commerce(SRC), known broadly as Click-to-Pay, is becoming more common, allowing shoppers to easily check out when completing online purchases and encouraging customers to return to the merchant. Click-to-Pay streamlines the checkout process by letting consumers add their preferred payment options to a cloud-based wallet, eliminating the need to enter information every time they check out. Indeed, the issue consumers cited most when using guest checkout was there was no option to save information for future purchases, adding time to the checkout and requiring significant manual entry of data.1It’s no wonder that even in countries where SRC is not yet available, nearly two-thirds (62%) of merchants said they were very interested in this security feature, according to a global merchant survey commissioned by Discover® Global Network.
3. Mobile Point of Sale (mPOS) or Self-Checkout Kiosks
Providing customers with the flexibility of self-service checkout or paying anywhere in the store is gaining popularity as more businesses offer options to help improve the customer experience. In fact, 87% of merchants surveyed said they have already deployed or plan to adopt mPOS devices enabling payments anywhere on the floor, while 71% said they had deployed or planned to deploy payment kiosks for self-service checkout.1In addition to a faster checkout experience, shoppers cite convenience, the ability to bag their own items, social distancing and shorter lines as some of the reasons mPOS is preferred.2
4. Buy Now, Pay Later (BNPL)
With the buy now, pay later option, customers can make a purchase now and pay off the item in installments over a fixed period. With the number of BNPL users in the U.S. growing more than 300% per year since 2018, reaching 45 million active users in 2021, merchants are increasingly adopting this method.3BNPL allows customers to purchase products by providing affordable payment options at the point of sale, improving customer experience and building loyalty.
5. Digital Wallets
Convenient in-person or online digital wallets are increasing in popularity. A full 40% of consumers are using digital wallets and contactless cards more frequently as a result of COVID-19. And of those consumers who increased their digital wallet use during the pandemic, 68% perceive them as more secure than before.4When shopping in-store, customers can enjoy the simplicity of merely waving or tapping their mobile device over compatible card-reading devices. For online shopping, 38% of consumers globally said that a digital wallet was their preferred payment method.4Each of these methods is provided by Discover® Digital Exchange, which gives merchants the ability to connect consumers with some of the most popular digital wallets, including Apple Pay, Google Pay and PayPal.
6. Faster Payments
Consumers and merchants are both increasingly looking for near real-time payment capabilities. Like peer-to-peer (P2P) options for consumers, merchants are also incorporating new functionalities that provide for faster payments. Three in four consumers (75%) indicated that the ability to transfer or receive funds instantly would significantly improve the customer experience.4Discover® Deliver enables financial institutions and Discover Cardholders in the U.S. to send or “push” their payments to recipients for more positive, seamless and secure transactions. This is important for merchants and companies that operate in the gig economy. In fact, 75% of consumers said the instant transfer of funds would significantly improve the customer experience. And this was particularly true for Millennials, who have the highest participation in the gig economy, with 85% agreeing it would improve the customer experience.”4
While convenience and speed of payment are critical factors in customer satisfaction, merchants should also keep in mind that giving consumers the option to pay by the method they prefer can be equally important.
Nearly one in four (24%) consumers surveyed globally left a store at least once in the last 90 days and did not make a purchase because their preferred payment method was not offered.4
Each of these concerns, for merchants and consumers alike, is pushing the industry to adopt new and well-proven solutions. By exploring and adopting the right payment opportunities, merchants can help ensure that the increasing desire for speed, convenience and safety is not only met, but provides the best possible customer experience.
To explore other trends that are transforming the payments industry, check out our latest insights here.