Credit Card Payment Processing Trends for 2021
The coronavirus pandemic of 2020 changed the way the world worked. With government-mandated lockdowns and limited shopping opportunities, every company felt the burden of trying to retain their customers while the pandemic raged on. The pandemic also changed consumer behavior and customers’ expectations when it comes to credit card payment processing.
Stay up to date and learn the seven biggest payment processing trends of 2021.
1. Contactless Payment Options
Face-to-face commerce sustained a significant blow from the pandemic. Everyone became very aware of how often they interacted with other people and exactly what was touched. With that awareness came a spike in demand for contactless payment options.
Consumers see contactless payment as a safer option for their health, and many will continue to refuse the unnecessary risk of traditional payments whenever possible.
Forty-eight percent of consumers refuse to shop at a store that does not provide contactless options. Contactless payment is in such high demand that a full 63 percent of consumers say they would switch their business to a company that provides a contactless payment option.
The Solution: NFC
Making the change to contactless payment systems does not require a major hardware update. A single near-field communication (NFC) reader integrated with your existing payment processing options can process NFC-enabled cards, mobile apps, and wearable devices and provide a contactless payment option for your customers.
2. Omnichannel Options
The COVID-19 pandemic normalized buying a product online and using curbside pickup. Consumers have become accustomed to having a seamless customer experience, whether purchasing online or in person.
To meet this payment processing trend, there is a greater demand for stores to provide omnichannel payment processing options. Omnichannel options meet your customer wherever they are and provide them with a consistent customer experience.
The Omnichannel Spectrum
Omnichannel payment options include:
- Online payments
- IVR payments
- API payments
- Virtual terminal or web portal processing
- Credit and debit card processing
- ACH processing
- Mobile app payments
- Check by phone
- Payment by text
- Kiosk payments
When companies provide omnichannel options, customers are not limited in how and where they can purchase your product. Consumers can purchase products in their preferred channel, which can help increase revenue for your company.
3. Masked Cards
Traditionally, consumers use one card that is directly connected to a debit or credit account. If the card is stolen, the card can then be used to make fraudulent purchases. Masked cards are a new tactic to help avoid card theft and fraud.
Masked cards are virtual disposable cards. To the store, when you use a masked number, everything appears to function like normal. However, no lasting personal information is included in the masked card. It is even possible to attach a fake name and address to a masked card to ensure no personal information gets connected to your card or purchase.
It is possible for masked cards to be valid for a handful of purchases before they expire or for them to be “burners” that are only usable once. This helps prevent fraud because if card information is obtained, it is impossible to connect the card information to your personal information or make any additional purchases.
Currently, virtual masked cards are only available when making online payments, but with omnichannel purchasing options, the opportunity opens up for them to be used in-store as well. For stores that have in-store omnichannel payment options, customers are able to make in store purchases with a masked card using an alternate payment portal.
4. Mobile Wallets
A growing payment processing trend in 2021 is the increased use of mobile wallets. Initially, mobile wallets were used only as a contactless payment option, but they are starting to grow in application and function.
Expanded Use Options
Mobile wallets are going beyond storing purchasing information and can now include additional digital information like coupons and reward card information. Some brands are seeing the growth of mobile wallets and have decided to create unique mobile wallet applications to directly target customers with limited-time deals, advertisements, and in-store credit.
There is also a growth in demand for mobile wallets outside of basic purchases. For example, public transit allows mobile wallets for payments at kiosks and turnstiles. Some hotels are beginning to use mobile wallets to replace hotel key cards.
The coronavirus pandemic impacted the global economy. For weeks and months, entire nations went into shutdown, triggering a global recession. Millions of families were affected by the pandemic, and budgets became extremely tight.
Because of the financial crisis that came with the pandemic, consumers are very aware of their spending and banking habits. People are keeping an eye on every payment, charge, and transaction because they can’t afford an unwanted or unexpected fee.
Hidden Charges Are No Longer Hidden
Because of that eagle-eyed scrutiny of their card statements, consumers are demanding transparency. Hidden or secretive charges are questioned and are not overlooked or forgotten. Customers are demanding to know more about the fees involved with their cards. This includes additional payment processing fees.
Because every cent matters, there is a demand for more information about each fee, its purpose, and a defense of why it is necessary.
6. Peer-to-Peer Payments
Cash was already on the way out before the pandemic, but COVID-19 sped this up. Only 16 percent of consumers always carry cash, and the number is continually declining.
Most stores have made it easy to make payments with a card, but there’s a new problem consumers are faced with: How do you lend money or quickly exchange cash with a friend or family member if you don’t have cash? The need for quick, everyday transactions has spurred the growth and development of peer-to-peer payment options.
PayPal and Beyond
Initially, the only peer-to-peer payment option was PayPal, but the market has grown to include multiple apps, programs, and companies. Some credit and debit card providers have recently been willing to connect cards to peer-to-peer accounts like:
- Venmo (which is owned by PayPal)
- Google Pay
7. Better Rewards
In the past, reward programs were very straightforward. For each purchase made on a credit card, the consumer would earn a point value that could be traded for cash, miles, or a product. However, those simple reward programs are getting updated to match the market trends.
Consumers are looking for reward programs that are more flexible, transparent, manageable, provide additional rewards for e-commerce purchases, and/or provide extra rewards and support for local businesses.
Preferred Payments Can Help
Preferred Payments can help you streamline payment operations and create frictionless checkout flows. We work with a wide variety of companies and industries, including:
- Non-profit organizations
With the competitive pricing and complimentary services we offer our clients, we’ve helped businesses save an average of 40 percent a month. We do this by utilizing Interchange Plus Pricing, also known as “pass-through pricing.” This gives us competitive and transparent pricing, while allowing you to see the true cost from card brands.
Flat Rate vs. Interchange Plus Pricing
Interchange Plus Pricing offers a big advantage over a flat-rate. While flat rate pricing seems straightforward, it’s much more expensive. Flat rates are attractive, because there is no potential for any changes or variance in cost, but they’re designed to take advantage of your business and will always charge you more than what is apparent or necessary.
Sign up for an account today and find out more about how we can help your company.