In “The Way Payments Are Now Done,” 33 payment executives discuss what payments’ “new normal” looks like. Jim McCarthy, president of i2c, is one of those contributors. He discusses how businesses and consumers have come to expect more digitally enabled convenience in their day-to-day transactions, and the importance of providing reliable infrastructures to support those experiences.
Over the last year, we’ve witnessed a host of changing routines across the end-user spectrum, influenced at first by necessity and later, it would seem, by a growing comfort with and openness toward new payment experiences. From getting food delivered to forgoing bank branches and cash, consumers and businesses have learned dozens of new routines and continued to create new ones amid an abundance of options.
Sure, the shift to digital payments was well underway before storefronts closed and safety precautions accelerated adoption – but as consumers had to make more of their purchases online or via contactless payment methods, many new routines were introduced.
Did some of our usual resistance to changing routines wane in 2021? If so, is it temporary?
The Card Is Still Important
According to Visa’s recently published survey, nearly 50% of consumers would not shop at a store that did not offer contactless payments at the beginning of the pandemic, and many methods of contactless payments are up year over year from this initial surge, such as the 30% increase in tap-to-pay usage among U.S. consumers.
While the shift may have started over health concerns, Oracle finds that 96% of all current users intend to continue using contactless payments post-pandemic. These takeaways and others not only illustrate the lasting importance of the card, but also what feels like a wide-open or shifting state of payments, where assumptions are quickly turned on their heads and agility becomes more critical by the day.
At our organization, we’re supporting the transition the way we always have – by listening to issuers, whether they’re banks, FinTechs or other enablers, and not assuming we know what they need, but rather co-creating with them in whatever way their vision and the environment require.
As further proof of the shifting landscape and need for agility, a recent PYMNTS report noted that while Apple still holds a large share of the mobile wallet market, in-store mobile wallet use had declined by 26.2%. I’m not sure very many people saw that coming.
Enabling an Ecosystem
Why is this? Could it be that as the context changed, the practicality of the card came into clearer view?
Maybe the ability to dip, swipe or tap a bank-issued smart card without having to unlock a phone or lower a mask suits someone just fine in one situation, while having the same card virtually in an app for making a quick balance inquiry or bill payment is equally convenient just moments later.
These changing patterns and expectations underscore the importance of the supporting ecosystems and platforms that interconnect them and are tasked with delivering varied user experiences reliably and consistently. In other words, it’s probably a good time to talk about table stakes.
For example, does the inability to reach customer service in a pinch or a declined authorization not only aggravate the customer, but possibly push them away from one routine and leave them open to another?
As businesses and consumers come to expect more digitally enabled convenience in their day-to-day transactions, it will become increasingly important that those experiences rest on reliable and secure infrastructures that can handle not only volume growth, but a multitude of moments.
What Will Normal Look Like in 2022?
It’s difficult to say whether we are witnessing a new level of openness on the part of end-users, lasting shifts in routines, or just an acceleration of trends that were already in the making. Regardless, the stage has been set for an unpredictable world where rapid innovation and resilience are vital. Maybe next year, you’ll be paying for gas with your car, sending a remittance overseas to Mom via cryptocurrency or trying BNPL for the first time. If we’ve learned one thing over the last year, it’s that almost anything is possible.