Even as consumers have returned to in-person shopping, they aren’t ready to give up the convenience of digital payments. Instead of returning to previous ways of paying, consumers are sticking with behaviors they picked up during the pandemic. They’re opting for digital payments over traditional cash and credit card options—trends you can expect to hold strong.
The checkout process is now one of the most important parts of the sales journey, but what does that mean for businesses? And, what payment trends can brands expect to see over the next 12 months?
Ahead, explore the ever-changing landscape of the payments industry, top payment apps and digital wallets, and ways to increase revenue and improve conversion by tapping into the latest digital payment trends.Click here to start selling online now with Shopify
6 payment trends to watch in 2023
1. Online and offline payment methods blend
Even as shoppers return to brick-and-mortar stores, they’ve changed the way they pay for goods and services.
Rather than going back to physical credit cards that require paper receipts, there’s now a preference for frictionless payment methods. These methods reduce the steps in the buying process and include mobile and digital wallets, one-click payments, auto-renewing subscriptions, and in-app payments.
Shoppers can now order ahead in-app and pick up curbside. This payment trend of browsing online and purchasing something you can pick up and wear within the hour, allows consumers to pay how they want and still enjoy the immediacy of the brick-and-mortar experience.
Merging online and offline payment methods so customers can shop where they want, when they want, will continue to be prevalent in 2023. Businesses processed $3.9 trillion in frictionless payments in 2020, a number that’s expected to increase to $8 trillion by 2024.
2. Creators can receive in-app tips from followers
The rise of digital payments as a payment trend has made it considerably easier for creators to get paid online. Instead of relying on product sales, affiliate marketing, and brand sponsorships, social media creators will be able to get paid directly through their chosen app by their followers. TikTok has a tipping feature for accounts with over 100,000 followers. As a Twitch affiliate you can receive donations on your streams via Twitch Bits, a form of virtual currency.
These types of digital payments allow consumers to continue the in-feed experience while creators, influencers, and small businesses can generate revenue. Influencers can receive tips without losing a cut of their money to a third party.
3. Digital wallets are the norm
Apple Pay, Google Pay, Shop Pay, and other digital wallet options are now a common fixture alongside other traditional payment options at the checkout counter. If you don’t give customers the option to use a digital wallet, you’re limiting the ways they can pay you.
Paying by phone using digital payments has become a convenient way for shoppers to make purchases in an instant, whether they’re in-store or buying online. More than four billion global consumers will shop using their digital wallets by 2023. Digital wallet customers will exceed 1.6 billion at point of sale (POS) in 2023, accounting for 30% of all POS payments and making it one of the big payment trends to watch.
4. Payment apps are the new lifestyle apps
Consumers now rely on their phones for pretty much everything, from ordering an Uber to booking dinner reservations to monitoring their blood glucose levels. As a result, expect to see a wave of “super apps” popping up. These apps act as a portal to a number of different virtual products and services.
BlackBerry founder Mike Lazaridis was the first to use the “super app” term, defining it as “a closed ecosystem of many apps that people would use every day because they offer such a seamless, integrated, contextualized, and efficient experience.”
China’s popular WeChat app is a prime example. It started off as a simple messaging app, but now offers a collection of services including taxi rides, virtual wallets, hotel reservations, games, and even medical consultations.
In 2023, expect to see more of these super apps emerging with key digital payment features like buy now, pay later (BNPL) programs, which let consumers pay off purchases in monthly installments, and flexible payment methods.
5. More buy now, pay later (BNPL) companies
Buy now, pay later companies (also referred to as BNPL) have exploded over the past couple of years in the payments industry. Financial uncertainty during the pandemic led to an influx of apps that let consumers spread payments out across monthly installments—and it was a win for both brands and shoppers. Brands are able to convert more customers by promising lower initial payments and shoppers can invest in higher-priced products without breaking the bank.
BNPL payments are expected to account for roughly 24% of ecommerce transactions by 2026, and 65% of merchants added BNPL as a payment method in 2022. It’s clear to see how popular this payment method is through the sheer number of options on the market. These include Shopify’s Shop Pay Installments, Affirm, and digital payments pioneer PayPal.
The BNPL benefit to brands is undeniable, too. According to the brand’s director of business development, Will Beck, Shop Pay Installments accounts for 6.5% of Pillow Cube’s gross merchandise value (GMV). “We’ve also seen a consistent increase in our average order value rate,” he says.
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6. QR codes are commonplace
QR codes seemed to die out years before the pandemic, only to come back with a vengeance when brands and venues were trying to limit the amount of cross-contamination through money, tickets, and receipts.
Now, QR codes are prevalent in a number of settings, including restaurants, where diners can scan a code to view the menu, place an order, and pay for their meal without waiting for a server, and physical stores, where shoppers can unlock discounts and extra product lines by simply scanning a QR code. Decathlon’s “Scan & Go” app allows shoppers to skip long queues by scanning a QR code in-store, opting for digital payments, and getting products delivered directly to their door.
QR code payment users are expected to exceed 2.2 billion by 2025, equating to 29% of all mobile phone users globally.
These trends in the payments industry are here to stay
The digital payments industry is undergoing a significant shift, offering payment services and products in demand by consumers. More and more, payment trends are moving toward digital payments, as consumers see them as an easy way to buy. Buyers who never considered using a digital app to pay for their lunch are now using smartphones and digital wallets to pay without a second thought.
In 2023, consumers will expect businesses to give them options when they pay. From digital wallet options to buy now, pay later loans, frictionless payment methods mean better conversion and increased customer satisfaction with your brand. To stay ahead of the curve, follow the continued growth in the payments industry and adopt emerging payment trends to let customers pay the way they want to pay.
Wrapping Up:
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The article reference: https://www.shopify.com/blog/payment-trends