The year 2020 has seen many seismic shifts, which besides changing deeply ingrained consumer behavior are also shaping the future of payments. Taking stock of the digital payment trends that transpired and of those that accelerated in 2020, here are Visa's top predictions for 2021.
Prediction 1: The evolution of credit card benefits. In 2021, we will see a distinct sure evolution in credit benefits shifting from travel-specific offerings to everyday items as global uptick in credit usage reaches new heights and COVID continues to ground travelers around the world. Even if your next trip is to your couch, these benefits will help you make the most of your time at home in 2021 until we can resume traveling.
Prediction 2: eCommerce IRL (in real life). The mainstream emergence of integrated commerce, the ultimate customer experience. In an unprecedented year for eCommerce, driven by the general need for companies to provide online buying options curbside pickup and new forms of delivery, among others, 2021 will further push integrated commerce toward becoming not just a trend but commonplace. Less friction, new technological advancements for app-centered buyers and a multi-channel commerce strategy will allow businesses to be even more nimble and meet the constantly evolving needs of their customers.
Prediction 3: Buy now, pay later is here to stay. With the acceleration to digital-first experiences, we can add installments to the list of consumer expectations for speed, flexibility and convenience in how they pay. The 'Buy now, pay later' although a global trend is gaining ground in Pakistan, and prominent ecommerce leaders such as Daraz are aggressively promoting installment plans on their platform.1 Expect to continue seeing growth in the new year as consumers look for the flexibility to shop what they want, when they want, without breaking the bank.
Prediction 4: Digital payments - the growing default way to pay. There is no reverse gear on 2020 in terms of the evolution seen within the digital payments industry around the world. According to Visa's Stay Secure campaign, COVID-19 impacted the payment behavior in Pakistan, revealing that 55% of online shoppers expressed their willingness to continue to make more purchases online, and 49 percent said they will continue to opt more for paying with card over COD. For in-store purchases, 56% of consumers say they will continue to use QR code payments with their mobile phones more.2 And we have no reason to believe this will revert back once the world returns to its new normal. As part of the expansion, point-of-sale payments and financing platforms will each undergo major transformation to ensure digital-first options are the option, as well as a rise in digital wallets becoming a preferred method for consumers to make purchases.
Prediction 5: Tap to Phone. As contactless becomes the default payment experience around the world at the point of sale, Tap to Phone will enable micro and small businesses to enter the digital economy with the simplicity of an app. Tap to phone enables sellers to accept contactless payments without the need for a payment acceptance terminal. We're seeing early stages of this product growth and expect 2021/2022 to be big years for growth as contactless consumer usage continues to grow.
Prediction 6: Digital marketplaces are the new Main Streets for SMBs. Small business owners are always looking for ways to branch out beyond their local community, especially now when in-person shopping and COVID regulations have drastically altered the way SMBs stay connected to customers. In 2021, the addition of marketplaces as a new digital "Main Street" for small businesses will be imperative to their survival. Not only will they use marketplaces to gain exposure, but also to reach new leads, provide 24/7 access to products and create new customer service experiences for digital-first customers.
Prediction 7: The small business response to fraud activities. Card Not Present fraud activities will continue to rise but take on added meaning for fraudsters in their abuse of eCommerce and a lack of authentication options. Given the shift to online-first offerings, small businesses will also need to take note of this trend as they are not as equipped as big firms.
KAMIL KHAN, VISA COUNTRY MANAGER FOR PAKISTAN
Copyright Business Recorder, 2020