Cash is dead. Well, it isn’t quite obsolete yet, but it’s certainly falling into an irreversible decline. Surveys show that in many countries digital payments are outstripping cash payments, and you can be sure that with the tech-savvy ‘Millennial’ market having more and more influence on the global landscape, it’s a trend that’s certain to continue.
The rise of mobile payments
The domination of the smartphone has been the catalyst for a lot of the change in the way customers want to pay. In a world where we are increasingly reliant on our phone, it was inevitable that consumers would expect the introduction of technology allowing us to use our phones to pay. And that’s exactly what we now have with the introduction of services like Apple Pay and Android Pay.
Going forward, we can expect this technology to become more and more of the norm. But the good news is that being able to offer these options to your customers in a face-to-face environment is again pretty straightforward, as you’d use the same machine that you’d generally use for tap-and-go card sales.
E-commerce and new payment technologies
Of course, e-commerce isn’t being left behind, with an increasing number of options becoming available for online purchases. Apple Pay offers its users the option to purchase from websites visited through Safari, and through some other apps. Android currently only offers payment through apps, but of course this could expand to websites in the future. (You do of course need to work with Apple Pay and Android Pay to offer these payment options.)
So is the smartphone replacing the credit card?
Well, not really. Although customers may not need to rummage for a bit of plastic in their wallet, technology such as Apple Pay and Android Pay means customers must use their existing card to register for these services. So effectively these types of technologies are using the existing payment networks used by banks and credit card companies – the difference is they’re just designed to be faster, more convenient and more secure.
As a merchant, payments you receive through these technologies are processed in the same way as a credit card payment – the key difference is that due to the token and encryption systems used you never see the customer’s card details. So essentially it’s a behavioural change driven by the way consumers are wanting to interact with businesses – the backend money transfer process stays as is.
Looking to the future
That’s not to say that’s the way it’ll stay though. Technologies are already starting to emerge that put the focus on the customer ‘pushing’ payment to you using your details, rather than you ‘pulling’ payment from them using theirs. For example, a customer could use an app that is directly connected to their bank and send money via a mobile number, or by scanning a QR code on a bill. Neither they nor the business has to expose any account details, and cleared funds move in real-time. Innovations such as these could also see the end of many of the issues and costs involved in more traditional card payment methods.
Ultimately, it’s an ever-evolving landscape, but one you need to embrace to continue meeting and exceeding the increasingly sophisticated expectations of your customers.