The past decade has seen substantial changes in technology and payment trends. Each year presents new pieces of the tech puzzle, allowing for easier monetary exchanges. Both merchants and consumers benefit from this increased efficiency.
Modern technology enables payments to become far more secure. These new payment trends allow for less overhead for merchants, and a satisfying ease-of-use for consumers. In fact, research offered by the ETA (Electronic Transactions Association) showed that 70% of all consumer spending is now done via electronic methods.
So, as we move through 2017, it is important for business owners to understand current tech and payment trends, and how they can affect viability, convenience and your bottom line.
Cloud Expansion
Cloud-based software continues to widen its reach in the expanse of payment trends. Those who own small businesses should recognize the value of this ever-expanding cloud. This is especially true as cloud-based POS systems have become more of a staple (and less of a trend).
POS systems offer merchants a slew of payment options. Plus, it provides small business owners with the ability to track sales, access real-time analytics, and update inventory–which is included with these systems. Enveloped within cloud POS systems are ways to enhance customer marketing strategies, and additional social selling tools as well.
All business information gets stored in the cloud This allows for far better space management than the cash registers of old. Company information can be readily accessed from any location without additional fees incurred when the cloud requires an update. This lets small business owners retain more of their hard-earned money.
Another benefit is the added security found in the cloud. A thief can’t break-in and steal all the info floating around in cyberspace. (That is, of course, so long as passwords are properly protected.) This added layer of security, plus reporting flexibility, and the benefits of easier transactions, makes cloud-based POS systems a must-have for small businesses.
Mobile Payment Trends Invasion
Mobile payments are probably the biggest up-and-coming trend in the payments sector. In fact, Business Insider revealed that by 2021 there will be nearly 28 million mPOS devices in use. That’s a huge leap from the mere 3.2 million that existed in 2014.
Part of the explosion is due to the fact near field communication (NFC) is being utilized. It allows consumers’ phones to interact with POS systems when they are within close proximity. Younger consumers—especially Millennials—are particularly fond of this new technology.
To exchange the necessary data from cell phone to reader, they both must have NFC-enabled chips installed. Then the consumer holds the phone close to the reader, which authorizes the purchase, and prints (or emails) a receipt. The biggest challenge for merchants is ensuring that their credit card readers are updated and NFC enabled.
But the investment is certainly worth it. According to a report, 50% of the time it takes to process a conventional card can be saved via NFC methods. Customers and merchants are both winners in this time-saving innovation.
Subscription Service Resurrection
Though recurring payments are often the bane of merchants due to the frequency in which they lead to chargebacks, it appears these are payment trends coming back from the dead. Millennials are particularly fond of subscription services and the convenience they offer.
Bear in mind that subscriptions do offer some significant positives for merchants as well; they are excellent purveyors of sticky relationships. This provides the potential for a guaranteed stream of revenue for merchants to reinvest and strategize.
However, it is imperative for merchants to remain vigilant about their customer service and their chargeback prevention tactics. Consumer enthusiasm quickly wanes if they feel they can no longer trust an e-store with their hard-earned money. And merchants only reap the benefits when customers are happy.
The reality is that customers love the convenience of “setting it and forgetting it.” But that doesn’t replace the necessity for exceptional customer service on the merchant’s end. Building great customer relationships and providing speedy responses to feedback helps merchants ensure that the revenue stream is positioned for long-term growth.
Reward Overload
Although customers are seriously overloaded with rewards programs, there is a desire for more. They expect newer reward offerings to be bigger and better than the last—and old offerings to be maintained and regularly improved upon.
Creating a rewards program that meets their needs and desires requires merchants to get to know their customers. Thankfully, technology and information abounds. Paying attention (via Big Data) to the paths customers utilize to arrive at purchases will help gain insight into their thought processes and desires.
This way, rewards programs can be fine-tuned and marketed in ways that yield better engagements. Customer interest can always be sparked with the use of promotions, deals and coupons. Rewarding customer loyalty will help improve retention rates. It costs five times as much to acquire new customers than to keep existing ones.
Order Placement Mobilization
The rise in mobile ordering isn’t just a Starbucks phenomenon. The beauty of mobile ordering is it allows customers to place an order, pay for it, and pick it up without ever having to wait in line. Current research suggests it could be available in half the quick-service-restaurants (QSRs) in the US by 2018.
The ease-of-use for customers results in increased sales for merchants. Adding mobile applications to small businesses is highly advisable.Customers appreciate the convenience, it keeps your business trending, and it increases how much customers are likely to spend. But managing customer expectations and preventing negative experiences are still critically important; you can’t succeed without happy, engaged customers.
Although mobile ordering is far more prevalent in the restaurant industry, it’s an increasingly useful purchasing method for grocers (and other box stores) that sell regularly-replaced products. With dedicated apps, customers can order a new vacuum cleaner, or the associated attachments, and pick them up at the counter without having to search through the store or wait in line.
Technology provides merchants with safer checkouts, convenience, and the opportunity to reach global audiences. Those who recognize the value of these advancements—and willingly adopt them—reap the rewards.
After all, it’s a buyer’s market.
Tell us about the payment trends and strategies that are affecting your business.
