03 Jun 24

What Are the Trends in Payments for 2024? See What’s Happening at the Checkout

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It’s smart to turn to market research companies and industry analysts for information about which payment methods have growing adoption or are set to become more common in the future. However, it’s also wise to see how what they’re saying stands up against trends in payments at the checkout.

Kristi Lockhart, General Manager of Strategic Merchant Relations, and Jeannette Andino, Strategic Accounts Relationship Manager, at Discover® Global Network, connect with retailers every day to discuss their processes and the tools they need to optimize transactions.

Here are the trends in payment in the U.S. that retailers are aligning with to meet consumer demands:

  • Digital payments continue to gain momentum.

Cash use is on the decline. Andino says, according to the International Council of Shopping Centers, Gen Z consumers make most payments with debit cards. Among the Gen Z participants in the ICSC study, 45% use debit cards and say it gives them an easy way to keep track of expenses.

Overall, however, look for consumers to use all forms of digital payments. The Fintech State of the Union report from Discover Global Network in partnership with  451 Research, reports that in 2022, 78% of consumers used digital payments. Additionally, 87% have at least one fintech app, and 28% have three fintech apps.

  • Expect more contactless payments in more places.

Although contactless payments saw only modest gains in adoption in the U.S. over the last decade, the payment method reached a turning point in 2020. Consumers more concerned with hygiene during the pandemic opted for contactless payments – and discovered how convenient they are. As a result, the number of transactions with contactless payments continues to grow.

Lockhart says to watch for contactless payments to become commonplace in more retail segments, for example, big box home improvement stores, that will join other retailers who accept them.

  • Consumers make more online payments on mobile devices, even when shopping in-store.

More consumers adopted buy online, pickup in store (BOPIS) and curbside pickup during the COVID-19 pandemic. Lockhart comments that her clients are seeing the trend continue. For some, 30% to 60% of their sales are online for in-store pickup. Furthermore, some “online” orders take place in-store. Sales associates with mobile devices can help customers find items that are out of stock in the store, place orders, accept payments on a mobile device, and have items shipped to their homes or to the store for pickup. These “endless aisle” solutions make retailers' entire inventories available to consumers – just as when they’re shopping online at home. Retailers also benefit. Without these capabilities, consumers looking for particular items may begin to search online while they’re shopping in the store, find them elsewhere, and place orders with competitors. With an endless aisle solution, retailers can save those sales.

  • More purchases start with social media.

Andino says more of her clients are communicating that they’re capturing sales from social media, particularly Instagram and TikTok. By targeting consumers with particular interests or building relationships with social media influencers, merchants can increase sales. In fact, LinkedIn reports that 78% of businesses that sell on social media outperform businesses that don’t.

  • Merchants accept payments on consumer devices with SoftPOS.

Retailers will begin to take advantage of SoftPOS, which allows them to accept contactless payments directly on a smartphone or tablet. Andino and Lockhart expect micro- and small merchants to quickly adopt this trend in payment so they can accept contactless payments without investing in expensive payment devices.

As larger businesses and enterprises explore its value, however, SoftPOS may become common wherever consumers transact.

  • Merchants get tough on fraud.

While merchants focus on expanding where they capture sales and the payments methods they accept, they will also continue to explore ways to fight fraud. For example, Lockhart expects to see ecommerce businesses adapt processes to prevent “returns” that don’t contain the merchandise the consumer wants a refund for and rely on security technologies like tokenization to authenticate online purchases and decrease chargeback risks.

Be Ready for Anything

A snapshot of payments in the retail industry today confirms that consumer behaviors in the U.S. are evolving – and retailers are committed to accepting the range of payment methods that can enhance shoppers’ experiences and increase customer satisfaction and loyalty.

Retailers and their solutions provider partners can learn more about trends in payments at Discover Global Network and by contacting Ingenico.

Author
Anthony walsh.png

Anthony Walsh

Head of Retail Sales

Ingenico US

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