Consumers: The Force of Change in the Payments Industry

Consumers: The Force of Change in the Payments Industry

In Dan Millman’s book, Way of the Peaceful Warrior, an old warrior named Socrates advocates that, “The secret of change is to focus all of your energy, not on fighting the old, but on building the new.” The advice is certainly applicable to those in the payments industry. In the last decade, digital technology has reshaped virtually every industry, giving customers far more choices and leaving them with far greater expectations. The Internet of Things has shifted the point of sale to be available to anyone, anywhere, at any time. Demographics are also changing. By the year 2020, Gen Z will comprise 40% of the customer base. Here is how these changes are affecting the payments landscape.

Customer Experience

Like two guys bragging about the gadgets on their new cars, retailers are competing to offer consumers the latest and greatest high-tech payment systems. The goal is to provide speed, convenience, and security across multiple channels. Customers, especially younger ones, crave a personalized shopping experience. Merchants that utilize data effectively to cater to individual preferences will earn brand loyalty in return. Data will also take the customer experience to the next level by offering services that give consumers a better understanding of their personal spending. Surveys have found that a high number of millennials and GenZers are interested in such services.

Loyalty Programs

Cash back, miles and points matter a great deal to consumers. So much so that a large percentage of people are willing to share their personal information in order to receive them. According to Accenture’s 2017 Payments Pulse Survey, nearly half of the respondents would be willing to switch their primary card to get higher rewards. Almost two-thirds in the survey expressed wanting to be able to redeem their rewards at the point of sale. This points toward a future where rewards will be delivered seamlessly in real time, as new technologies and smarter programs better serve customer preferences.

Mobile Payments

According to the Pew Research Center, ownership of smartphones went from 35% of Americans in 2011 to 77% in 2018. Despite this rapid adoption, mobile payments have been slow to catch on. It’s not for a lack of interest. A study by Mastercard Digital Payments, which tracked conversations on social media, found the subject of mobile payments was brought up in 75% of conversations on new ways to pay. This indicates that consumers are waiting for something better to come along. With the advances in APIs and open banking, this is predicted to happen. Although mobile wallets accounted for just $75 billion of retail sales in 2016 (around 1% of total sales), the number is expected to jump to $500 billion by the year 2020.

In today’s marketplace change is the only constant. To stay ahead of the curve, those in the payments industry will need to continually innovate and cater to the ever-changing needs and wants of their customers. Continuous innovation requires forward-thinkers and top talent. Attract the best to your organization by partnering with IMPACT Payments Recruiting. IMPACT’s experienced recruitment consultants at IMPACT have been working with some of the most premier payments companies in the industry for more than a decade to connect them with top talent for high-level positions. Our recruiting team is comprised of former payments industry professionals, so we have an in-depth understanding of how to target and evaluate candidates for your hiring needs. Learn more about IMPACT – contact us today.

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