It’s no secret that changes occur regularly in the payment space. The coming year is sure to bring new and substantial changes that will alter the way payments happen.
The decline in people using cash and the increase of digital commerce play significant roles in payment trends that are beginning to dominate the market.
1. Open Payment Platforms
Open payment platforms allow a participant to quickly access an API that works as a single platform to make payments. It accesses traditional systems as well as new types, and compiles them into one location. Open payment platforms strive to extend financial infrastructure to facilitate commerce across multiple networks. They provide benefits to employers and individuals by providing a central place in which payments transfer quickly.
2. Embedded Payments
Embedded payments happen by simply walking out of a store. Currently, numerous retailers are testing the technology. Buyers shop for everything they need, and the store scans the items and bills for them automatically through their app. This can be seen at Amazon Go locations. This form of payment eliminates long lines, and it increases efficiency. It’s a trend that will likely gain popularity with time.
3. Employee Stock Ownership Plan (ESOP)
Employee stock ownership plans, or ESOPs, involve the sale of the business to a retirement trust that provides economic value to the owner and the employees. ESOPs provide employees with a substantial amount of additional benefits, including helping the tax-efficiency and cash flow of an organization. Although it is not a full payment plan, it is a form of stock ownership employers can offer their workers.
4. Biometric Authentication
Biometric authentication uses consumers’ fingerprints to authorize a transaction. Currently, smartphones utilize this technology to unlock the phone, allow a mobile sale and make payments. The benefit of this method is security.
Credit cards and phones with a credit card on them are at risk of being stolen or hacked. However, it is much more challenging to make a fraudulent purchase if biometric authentication is activated on a device. As technology advances, this will be a useful payment method that provides increased security.
5. Mobile Wallets and Contactless Payments
Mobile wallets and contactless payments are rapidly becoming the primary payment method consumers are gravitating toward. Merchant Advisory Services’ study shows that nearly 60% of consumers paid by a mobile wallet or mobile browser in 2019, a 12% increase from 2018. Mobile wallets hold people’s credit cards, which makes it possible to pay for everything through a phone. The most popular mobile wallet is Apple Pay, which allows people to make purchases from their phones, tablets or watches.
Bitcoin saw a surge in use over the last few years, and it is now a useful payment method employers can use. These payments do not require businesses to go through any onboarding, and employees receive payment in less than 48 hours.
Bitcoin has no geographical limit on where funds can or cannot be sent. It also has an online ledger that outlines all transactions that are made with bitcoins that anyone can access.
Bitcoin is by no means an answer to every company’s payment method issues, but it is an alternative method that is becoming more popular. Some companies specialize in payroll, such as Bitwage, which can assist an employer if they choose to pay their employees in bitcoin.
Payment Trends Coming Soon
Merchants, employers, and consumers have a variety of payment methods available at their fingertips. These new payment trends will provide greater functionality and convenience for all who use them.
New forms of payment are a natural progression in business that allows for increased usability and efficiency.