North America has been known for their preference for plastic for some time, with credit cards being the top consumer payment method. Recently, however, the spotlight has begun to shift to mobile-payment methods. Thanks to the COVID-19 pandemic, these trends are beginning to pick up even more speed. As consumers become more open to new methods of payment, more and more brands are paying attention to remain competitive.
According to a recent consumer-behavior survey by Worldpay from FIS, 54 percent of respondents admitted they believed smart phones will soon replace debit and credit cards as the primary method of payment – in just five years’ time. The digital savvy generations – Gen Z and Millennials – were especially adamant about this. Recent research has also discovered that the coronavirus pandemic has sped up the adoption of digital and mobile wallets.
Shift to Digital and Mobile Wallets Picks Up Speed
This shift does not come as a surprise. In fact, it has been expected for some time. In other countries, like China, digital wallets are now the leading form of e-commerce payment and are projected to surpass cash by 2023. North American has simply been lagging behind, but is now expected to catch up quickly in the wake of the global crisis.
Another huge factor accelerating adoption is the current and emerging workforces: Millennials and Gen Z. Both of these generations are incredibly comfortable with technology, often being referred to as “digital natives”. Gen Z, for example, is the first generation to have never known life without social media and instant connectivity. Their acceptance of digital and mobile wallets is driving this trend.
According to the FIS survey, 75% of Gen Z have used a smart phone to make a payment in-store, compared with just 25% of Boomers.
Reasons for the Shift to Digital and Mobile Wallets
Why is this trend picking up so much speed? In addition, to the changes COVID has brought about, the demands of consumers are also evolving. The FIS survey also discovered that 62% of Millennials and Gen Z cited speed as the primary reason for using digital wallets. The primary concern for Boomers, on the other hand, is safety.
In order to stay competitive and relevant, brands need to be prepared. Not just for the challenges COVID has thrown at the business world, but also for changing customer preferences. The best place to start is to develop a clear understanding of what consumers want to see now and in the future and what kind of experience they expect. At the same time, businesses must ensure a quick, secure and convenient checkout experience.
Secure Reputable Payment Processing
To open a safe and secure merchant account, it is important to partner with a reputable payment processing company like emerchantbroker.com. Voted the #1 high risk payment processor in the U.S., EMB boasts an A+ rating with the Better Business Bureau (BBB). With the team at EMB, you can enjoy the best chargeback protection and prevention programs in the industry. In choosing EMB, you not only get a highly reliable and secure eCommerce merchant account for your business, but you also secure assistance in fighting fraud and mitigating chargeback levels related to your business.