COVID pandemic has dramatically changed the entire world. Apart from disruption, it has changed the leading commerce industry. It has changed consumer's behavior, making them adopt the "new normal". However, GenZ, has welcomed the new emerging payment methods with gusto.
Before proceeding, one need to understand, what exactly digital payment services are.
Digital payment services refer to contactless, cashless and paperless form of payment methods. Technology, therefore, plays the important role, that allowed the world to accept these more convenient payment services like mobile apps, Buy now Pay later services and AI/machines.
There are two important reasons for the increased popularity and growth of digital payments. First, these emerging methodologies are continuously increasing consumers satisfaction and second is, opportunities for companies are expanding.
Now let's discuss in brief, most popular payment methods for 2020-21.
One of the most used method worldwide is Digital Wallets. Users link their bank accounts, debit cards and credit cards directly to their digital account. For example, PayPal, Phone Pe, Google Wallet.
Consumers can use their Amazon account to pay for goods and services.
It works same as digital wallets. Users must first create a digital wallet account. Then users’ have to activate their mobile wallet on their mobile device by downloading the required app. This allows users to use their smartphones to make payments at any merchant with a near-field communication reader available at checkout.
There are many mobile credit card readers that attach directly to a smartphone and works just like in-store credit card machines, but are portable and require only a corresponding app.
BNPL is allowing companies to service those types of clients that want to pay over time. It has emerged in COVID times, when everyone was suffering from financial crisis.
Digital payments are future of emerging world. These trends will play a significant role in shaping our future payment methods. However, there is risk associated with these emerging trends. They are:
Since we are discussing emerging payment methods, it is still not cleared, that why we are accepting these methods.
In coming years, we will continue to see payment methods transforming from physical to the digital payment methods. We know for sure that; digital payments will continue to shape the future payment behavior. Let’s see what are the factors that are responsible for this change.
Consumers find digital payments convenient, as it saves their time and enables consumers to save their payment credentials in their mobile wallets for easy access.
Digital payment methods cut their costs. As when talking of traditional methods, then people use to visit banks, which is again time consuming. But with digital payments, consumers at home can make payments of any amount.
Payments represent a two-sided market, as providers need to be able to reach both merchants and consumers. Banks, GAFA, credit card schemes, super apps seem to be best positioned here.