A 2020 study revealed that nearly 2 percent of US businesses closed permanently, while over 41% shut their doors temporarily.
On the flip side, there’s been a post-pandemic boom in the payments industry. With more businesses pivoting to e-commerce and virtual services, cash has taken a back-burner.
According to a Business Insider report, online retail sales surged to $794.50 billion, a record-breaking 14.4% of total US retail in 2020.
To cope with these changes, the payment industry has undergone tremendous advancements. QR codes, e-wallets and NFC technology are becoming much more popular, and paytech more accessible.
In this article, we shall look at some of these trends and how they came about.
As the need for contactless transactions increased, payment solutions that required minimal interaction were developed. One of them is biometrics.
This payment method was initially unpopular until the pandemic happened. Biometrics utilises your unique physical characteristics to authenticate transactions and can be seen in many forms.
A growing use case for biometrics is the biometric payment card. This is a special card that initially records your fingerprint, and requires you to place your finger on the card sensor whenever you need to make a payment.
Biometrics is rapidly gaining traction as a preferred payment option. In a recent survey by Visa, it was found out that consumers are as likely to use biometrics authentication for in-store purchases as they would for online buys.
And according to Goode Intelligence, global biometric payments to the value of $5.765 trillion will be made annually by 2026. Also, there will be over three billion biometric payment users by 2026.
Those are pretty high numbers, and with the development of truly contactless biometrics like face/iris ID, it can only get higher.
BNPL (buy now pay later)
The post pandemic period saw people and businesses scrambling for loans because of the financial crisis caused by the COVID19 lockdowns. Banks were generally unwilling to give these loans or made the process unnecessarily rigorous.
So payment providers such as Klarna, Afterpay and Affirm stepped up with the BNPL payment method.
Instead of doling out a huge sum for that new phone, or putting it on your credit card with its enormous charges, you could spread the cost across a timeline.
The people loved it. And so it boomed.
A Kaleido report showed that BNPL's transaction value grew by 292% between 2018 and 2020. Also, top BNPL companies like Klarna and Afterpay almost doubled their sales in 2020, reaching $53billion and $11.1 billion respectively.
Despite crypto bans in various countries like China, the crypto and blockchain space is still thriving. Companies like Paypal, Visa and MasterCard are all taking steps to integrate crypto payments into their system.
However, it's not just the fintechs though, there are rumours that the e-commerce giant, Amazon, may be interested in accepting crypto. Though they have denied these rumours, their July job ad shows that they are thinking about the endless possibilities that cryptocurrency can bring.
The e-commerce industry may well be the biggest pandemic winner. With global lockdowns and stores calling quits, shoppers turned to online stores for their needs. Thus boosting e-commerce adoption, and increasing its share of total US retail sales by 75% last year (from 8% penetration in 2019 to 14% in 2020).
As a result, online payments have also . Apple Pay now handles 43% of all contactless payments, Google Pay holds 31%, and Samsung Pay accounts for 20%.
However, all is not lost for in-person and in-store transactions. Many countries are lifting restrictions, businesses are reopening their doors to customers, and commerce has resumed albeit with caution.
This has led to awesome innovations in contactless in-person payment methods, like SoftPOS.
In-person SoftPOS payments
Although in-store payment methods dipped a little over 3% in 2020, it still holds the majority of sales, and will likely do better post-pandemic.
Given the fact that the virus is still out there, customers and business owners are urged to use contactless payment systems.
And are there any options better than SoftPOS?
SoftPOS offers you a flexible and affordable way to receive payment without running the risk of contact. It uses NFC tech to transform your regular Android into a portable POS machine without any extra hardware.
SoftPOS also offers you the freedom to accept payments anywhere you go, while providing a secure and trustworthy way for your customers to pay for your products or services.
It is the future of paytech, and you are welcome to build with us.