Tuesday, June 18, 2024

Payment trends driving industry transformation

According to Adyen Country Manager ANZ Michel van Aalten, the payment trends of 2021 are being shaped by the changing consumer, as well as the lasting impact of Covid-19.

He says the following four intertwined themes will be at the heart of payments industry transformation and innovation.

Loyalty should not be assumed it must be earned

“Now more than ever, listening to customers and offering value in a loyalty program is critical for brands to be successful,” he says.

Adyen’s Agility Report research shows 72 per cent of Australians won’t return to a retailer if they’ve had a bad experience, either in-store or online expecting retailers to optimise the full customer journey to ensure high quality experience at every touchpoint. About two-thirds of respondents say that merchants need to improve the ways they reward shoppers.

Consumers will drive demand for Unified Commerce

“The businesses that consistently performed well throughout last year were those that combined their physical and digital worlds to create a fluid, channel-agnostic experience that prioritised the customer,” Mr van Aalten says

“With payments from all of their channels feeding into the same system, this practise – known as Unified Commerce – allows merchants to act with greater agility. Despite stores reopening, consumer demand for this digital infrastructure remains. This demand will grow even stronger in 2021.”

74 per cent of Australians expect businesses to maintain the flexibility they’ve shown in selling across multiple channels during the pandemic, as noted in Adyen’s Agility Report.

Contactless will extend its reach into every corner of retail

“The pandemic also increased demand for contactless payments,” Mr van Aalten says. “Consumers want to make purchases without worrying about their safety and they expect businesses to meet minimum hygiene standards.

Contactless payments are now the method of choice for half of all Australians surveyed in Adyen’s Agility Report, and most want to see retailers make use of technology to reduce person-to-person contact.

Alternatives to handing over cards, touching keypads, and handling cash include:

  • Digital wallets
  • Tap-n-go
  • Pay by Link technology
  • Tokenisation
  • QR codes.

According to Adyen, these have become more prominent payment solutions not just at point-of-sale but at multiple points along the customer journey, such as viewing menus and placing orders.

Instalments will become an everyday way to pay

The twin forces of increased convenience and tightening household budgets have brought pay-by-instalment options mainstream—a trend that will only grow in 2021, says Mr Van Aalten.

“Driven by millennial consumers, this modernised version of layby offers an appealing simplicity compared to credit cards. Both shoppers and retailers agree that customers who use Buy Now Pay Later tend to spend more, buy more, shop more frequently and be more loyal to retailers who provide it.”

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