After a long year, 2021 has finally arrived. 2020 saw a dramatic uptick in eCommerce, as well as easy payment methods and more. You can read our full recap of 2020 in the world of payments here.
Looking forward into 2021, we see a rise in payment technologies that will make purchasing even easier on customers and merchants alike. Let’s have a look at our predictions for 2021 in payments, and what we expect to see as growing trends coming up this year.
Multi Currency Wallets
By now, you may be familiar with eWallets – digital wallets that store your credit cards, allowing payments to be made via mobile phone. As eWallets become more widely used, new features are being added to make this form of digital wallet even more convenient for their carriers. One of these features is the ability to handle not only multiple cards, but multiple currencies.
eWallets can be used online or in-store with a device enabled for tapping for payment. With multiple currencies in a single wallet, shoppers save the high fees associated with currency exchange when making purchases. Great for travel, multi currency wallets eliminate the need to exchange cash and keep it on hand. Balances can be managed online, and many of these wallets allow for currency exchange from within the app itself. Merchants using a multi currency eWallet can receive cross-border payments with ease from their customers, in the currency they prefer. All with the safety and security features of a digital device.
Real Time Payments
Here’s a payment trend that’s poised to take off, and it’s directly related to how merchants receive money from their customers.
Real time payments are a payment processing feature which ensures the money reaches your merchant account almost immediately. Traditionally, payment settlements take time – in many cases 10 days or even up to a month – for the process to be completed and the money to clear to the merchant’s account. With real time payments (or real time settlements, as they’re otherwise referred to), the funds are made available to the merchant when they send the batch of payments through their PSP, typically once per day.
Real time payments have a positive impact on merchants’ cash flow, enabling them to access and leverage their money more quickly.
AI & Machine Learning
AI (Artificial Intelligence) and Machine Learning are trending technologies being used in a vast number of industries. These terms are often used interchangeably, but there are differences.
AI is essentially a technology to create systems that simulate human intelligence. They’re algorithms that learn from their own experiences and in many cases, adjust accordingly. AI is used in things such as Apple’s Siri, and computerized chess games.
Machine Learning is a subset of AI, and is used to extract knowledge from data. It enables systems (and therefore, users) to make predictions based on historical data. Machine learning is used in common applications such as Google’s search and email spam filters.
As you can see, this is a big topic. Let’s break it down into a couple of categories specifically related to the world of payments:
On the side of payments, these technologies are being used particularly in understanding customer behavior for the purpose of security. Pattern recognition allows these systems to understand and analyse patterns in purchasing behaviors, and flags a transaction that comes through that lies outside of the “norm” – such as unexpected bill payments, or higher-than-usual tips. As a risk assessment tool, machine learning cuts down on the manual processes of review and verification and helps to prevent credit card fraud.
You’ve probably heard of facial recognition technology and that, too, is a function of AI. By applying facial recognition AI, credit and debit card data can be securely stored and accessed using a facial ID. This can also be applied to voice-activated payments, making secure transactions with voice commands.
To the benefit of merchants and customers alike, machine learning can be applied to understand customer purchasing trends. Have you ever visited a website that had suggested products below the one you were looking at? That’s most likely a result of machine learning, which understands that many customers either view or purchase other products when they’ve been interested in the one you’re looking at. This helps merchants to more intelligently target customers through value-added selling, and helps customers to see additional products they’re likely to be interested in.
Frictionless customer experience is a term that may seem self explanatory – the entire goal is to identify points of “friction” (those moments on the purchasing journey where your customer might encounter a step or process that may cause them to abandon their cart altogether) and to eliminate them. This is a customer-centric approach with an understanding that the easier it is for a customer to complete a purchase, the more likely they are to do it, and to keep coming back to you.
A frictionless payment experience is one that makes it simple and smooth to complete a purchase. Think of some popular global apps such as Uber, Amazon, or Apple’s iTunes. When a customer is signed in, a simple click of one or two buttons confirms a purchase or service request, and that’s it. We are sure to see a rise in services like this, where purchases are one-click ready once a customer is logged in to their secure account while shopping.
2020 saw a rise in touchless payments, whether it’s through phones enabled with the technology, or cards which can be tapped on the payment terminal to complete a transaction. This payment type is easy and safe, allowing customers to make purchases with ease.
Most new smartphones are enabled with touchless payment technology, and Visa’s Tap&Go is accepted widely. Merchants should invest in terminals that accept touchless payments, allowing their customers to swiftly make their purchases.