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The Pandemics Impact On The Digitisation Of The Payments Industry
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Tanim Minha
- 23/06/2022
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The recent pandemic has accelerated the digitisation of the payments sector at undeniable speeds. Retailers are having to adapt to the ever-changing business environment as well as the high expectations of the public. Consumers are now more health conscious and they want more hygienic payment solutions. Contactless payments usage in the UK shot up by 12% in 2020, and accounted for 27% of all payments made in the country. This figure is only likely to rise even further with 83% of UK adults now using contactless solutions.
With this change in demand, the payment industry has been trying its hardest to come up with innovative technological solutions that can improve experiences for businesses and consumers. We thought it would a good time to look at some of the trends the industry is backing. Below we set out our top 5 payment trends for this year, and explained how your business can keep on top of them.
1. Buy Now Pay Later (BNPL)
One recent trend that is here to stay is Buy Now Pay Later agreements (BNPL). BNPL is a way for consumers to buy goods and services on credit and pay for them later without the need to use a traditional credit card. BNPL is becoming a common way for consumers to pay for items bought online, and their providers are slowly becoming household names with the most popular being Klarna and Clearpay. Consumers can pay back the amount they loan out for a purchase over a number of months in equal instalments with payments usually being interest-free.BNPL schemes are taking the payments sector by storm with more and more small businesses offering consumers some sort of option to pay later. It is estimated 15 million people in UK are currently using this sort of service with this number projected to keep going up in the next few years. The service is currently attracting young single adults and young families. However, this demographic is expected to naturally expand in the near future as more and more people use BNPL companies. Merchants will need to be prepared to offer BNPL schemes as consumers will soon expect the service to be available everywhere.BMS’ powerful PAX A920 machines can easily integrate with BNPL services like Klarna. This could give you an edge when trying to attract new customers. Check out our blog explaining how our card machine will benefit your business!
2. SME-Driven Market
During the Covid-19 pandemic there was a big push from community leaders to get people to shop at small businesses in order to help them survive. Government led initiatives such as ‘Eat out to help out’ helped increase footfall to small businesses and encouraged consumers to try out local businesses. This trend will likely continue in the near future with consumers looking to increase their spending at small local businesses. Research shows currently 70% of UK consumers are willing to spend 10% more from an independent or local provider rather than a larger cooperation. This will create many opportunities for small businesses to increase their market growth. It is also predicted that fintech companies will target small businesses in 2022 and beyond by providing slick technology-based payment solutions which can be utilised.
Since its inception, BMS has been championing small businesses and helped many small businesses grow to their full potential. We provide state of the art payment solutions which can transform your business. Luckily we have a blog that addresses the importance of how important local businesses are to the local economy!
If you would like to know more on how we can help you, send us a message and our team will be delighted to speak to you.
3. Digital Wallets
It is estimated that by the end of 2023 there will be around 4.4 billion global consumers using some form of digital wallets. A digital wallet can be seen as a virtual version of your physical wallet, and they usually have the capacity to store your debit cards, credit cards, loyalty cards, personal information and a host of other things. They offer consumers convenience and security as everything can be accessed easily using an app which usually requires a PIN or biometric authentication from the owner. For extra peace of mind, popular digital wallets like Apple Pay and Google Pay encrypt all information stored in them which actually makes them safer than a traditional wallet.It is now estimated digital wallets will soon be the most preferred payment type for consumers. Merchants need to make sure they are equipped with card machines that will allow them to accept digital payments.
4. Pay By Link
Pay by link has the potential to transform certain industries. It is simply a secure way for a merchant to collect an invoice. All they have to do is generate a unique payment link through their payment service provider then send it to the customer. These links are usually sent via email or SMS messages. The customer can then use this link to pay the whole invoice straight away. This method minimises the risk of chargeback for merchants and makes sure they get paid without any hassle. Pay by link will especially be useful in sectors like hospitality as many services like hotels take pre bookings. However, this technology still needs to be ironed out and the use of it has been low so far, although it is expected to grow by over 20% by the year 2027.
5. Stronger Security
It is paramount that businesses use safe and secure methods of payment transactions in order to protect themselves and consumers from fraud. There has been a trend of more sophisticated scams that have targeted consumers, banks and businesses. In 2020 alone, there was a total of £783 million that was lost across businesses due to payment fraud. In order to combat this, banks and financial institutions have tried to come up with innovative and technology driven solutions such as two factor authentication and biometric authentication. These efforts have so far been largely successful at curbing the increased efforts of fraud with banks and card companies saying they have managed to stop £1.6 billion in unauthorised fraud.
BMS can help your business take measures which can increase your security. We can provide you with a PCI compliance manager that will make sure your business is fully secure. We will also make sure your business is fully PCI compliant which will mean you avoid any non-compliant penalty fees. If you’d like to learn more about PCI Compliance, please read our PCI Compliance blog.
Book a 1-2-1 Consultation today with one of our Account Managers and see how we can help your business thrive!
So... What Are You Waiting For?
We want to ensure that your business is running to its highest potential. BMS can help you establish a simple financial process, to positively promote your business cash flow, alongside 24/7 help and other financial products.
So, what’s stopping you? Contact us today to improve your business and see how much you can save!
Sources:
https://fitsmallbusiness.com/contactless-payment-statistics/
https://www.bbc.co.uk/news/explainers-59582188
https://www.globalpayments.com/en-gb/commerce-payment-trends
https://www.hsbc.co.uk/current-accounts/what-is-a-digital-wallet/
https://www.ukfinance.org.uk/system/files/Fraud%20The%20Facts%202021-%20FINAL.pdf
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