J.P. Morgan recently released its hotly anticipated Payment Trends Report, packed as ever with the most critical findings from the financial industry. We identified 5 key trends in the report to set your payment compass to in 2021. We’ll walk you briefly through each one to help you navigate the rapidly shifting payments landscape and keep your strategy on course for success.
The accelerating pace of change in the payments industry and beyond means orienting your business to the most important trends has never been more urgent – but you don’t have to go it alone. AirPlus is doubling down its efforts to guide your payments strategy back to safety. For those of us not fluent in financialese, we’ve sifted out the best bits of the Payment Trends Report and organized them here so anyone can optimize their payment processes. Subscribe to our newsletter for regular insights on the corporate payment world and get in touch to learn more.
Without further ado, here’s the first key trend to drive your payments strategy.
1. Cashierless tech (not just contactless)
“Several pilots of cashierless technology were announced in the past year, the start of a fundamental shift in how consumers engage in commerce.”
Contactless is a given. Cashierless tech is the bigger deal when it comes to reimagining the seamless, integrated payment landscapes of the near future.
Accelerated partly by government mandates to maintain distance between shoppers, the trend towards contactless payment was already well underway for its perks in terms of customer convenience. Imagine entering a store, walking up to a product and lifting it off the shelf… then strolling right back out the door. This fantasy is fast becoming reality as retailers introduce cashierless tech, enabling shoppers to scan products with their phone or even automatically recognizing products leaving the store.
A buyer’s dream, sure, but companies stand to gain more than happy shoppers. By eliminating one of the biggest frictions in the retail purchasing experience, the report forecasts that this transformation also brings “new possibilities for customer service, reductions in losses and lower operational expense.” All reasons you can expect this trend to long outlive the social distance rules that have given them a boost.
2. Faster payments (for businesses, too)
“Gig economy drivers expect to be paid per ride. Insurance claimants expect real-time payouts. Small businesses want access to funds on the same day as the sale.”
It’s not just small businesses, if our own market research is anything to go by. Suppliers the world over are thirstier than ever for liquidity – not just because they’re cash strapped in the Covid economy but because they’ve gotten a taste of faster, easier payments and there’s no going back. This is where real-time settlement tools like virtual cards come in handy. They inject the immediacy into your procurement process that your partners will increasingly rely on for their working capital.
Pro tip: centralize your payment solutions wherever possible. Issuers like AirPlus or your local bank can handle upfront payments while you get billed in regular statements. This is the best way to keep rising working capital demands from eroding your settlement terms.
3. Recurring payments (built on relationships)
“Recurring payments were the stuff of utility bills and car payments. In 2021, a wide range of goods and services can be consumed on a regular basis.”
More and more businesses are applying lessons from the subscription economy to create recurring customer relationships and enduring revenue streams. This model is catching on in the B2B realm as well, with companies realizing the savings potential of an optimized payments strategy.
The biggest benefit for businesses? Recurring payments forge deeper relationships, feeding more data back into product and marketing and creating opportunities to tailor conditions to your mutual interests.
4. Simplified payments (for a complex world)
“Merchants are turning to a single provider with a variety of connectivity options to solve for complexity.”
The pandemic marked a massive shift to the internet, as we had nowhere else to go. Many businesses up and down the value chain were unprepared, their existing systems ill-equipped for ecommerce and their product management teams unfamiliar with words like omnichannel. If that sounds like a familiar story, know you aren’t alone: the entire business world has entered a phase of updating business models and migrating IT infrastructure, further boosting the rise of virtual trends like global marketplaces and social commerce.
How should you be managing this transformation? By turning to the convenience of a range of integrated solutions. A single provider offers one integrated payment portfolio, treasury services, commercial cards, and other payment management tools, while you also receive a collated set of analytics and uniform integration into the underlying technologies that you use.
5. Rising fraud (and the data to stop it)
“This rapid shift created opportunities for fraudsters, especially at merchants that lacked experience in digital channels.”
Periods of innovation tend to be as exciting for fraudsters as they are for visionaries. With so many brand new spaces to exploit, payments fraud has risen on the digital wave, and particularly benefitted from the high-pressure digitalization of the underprepared. Markets have responded differently, with Europe introducing robust measures like the PSD2 SCA and the US opting instead to absorb the risk in defense of easier customer experiences.
Regardless of your market, you need a multilayered approach. This means applying data from as many sources as possible. The best way to do that is by working with your payment partner, who can leverage their specialized resources to monitor transactions for suspicious activity at a large scale in real time, such as we at AirPlus are equipped to do. No matter how the landscape shifts from here, a trusted fraud prevention partner is key to making sure you build your payments strategy on solid ground.
Subscribe today for the latest corporate payment insights, and read J.P. Morgan’s full 2021 Payment Trends Report here.
[i] Banner photo by Jason Dent on Unsplash