Two years ago, we predicted that card-not-present would be the future of payments. We had no idea that COVID-19 would be a household name and that a global pandemic would push contactless payments to become the go-to form to make transactions in 2020.
When we drafted the predictions in 2019, we also made a bold statement that QR (Quick Response) Codes would make a comeback as a preferred form of payments — and they certainly did in 2020 — at restaurants and quick food service locations. We also predicted facial recognition and wearable devices would be a convenient way to make transactions too, anticipating that contactless payments would become the only way consumers would expect to pay.
Here are several thoughts we have about how fintech will evolve in 2021.
QR Codes
One of the most important developments for the fintech sphere in 2021 will continue to be QR codes. As mentioned, QR codes have been on the periphery for quite some time. We’ll continue to see them move more to the mainstream, especially as more businesses are using them as a form of payment. Contactless payments will also continue to be the norm and not the exception. More and more we will start to see contactless payment options in stores of all sizes – big box to mom and pop shops. Contactless is here and it’s not going away.
Service-as-a-Service
What we’ve seen over the past nine months is a shift in consumer behavior and that doesn’t typically revert. People have gotten used to service-as-a-service. Food delivery systems like Instacart are branching out to do store pick-up and delivery. If everyone can’t agree on what to eat, Door Dash takes care of that, with a delivery from multiple restaurants. Want to get out without getting out – curbside pick-up. Yes, people want to get back out to shopping and dining in and being more social. It’s likely though many people will look to pay using a digital wallet or tap-and go.
Innovation
People not being able to leave their houses for weeks and months drove inventiveness as to how to serve a customer when the in-person options are no longer viable and the online systems are overwhelmed. As much as there was the unknown, there was creativity and a commitment to make things work. Businesses worked together to provide solutions they may not have otherwise. We expect that inventiveness to continue in 2021.
The abrupt shift for many to advance the adoption of digital transformation will lead many to realize where there are gaps and they’ll need to figure out how best to fill them – either through innovation, M&A activities, additional investments, creating in-house solutions, or taking a step back.
Cannabis
We’re going to see advancements in payments for cannabis. With four more states passing legislation in November 2020 and a new administration looking to make quick economic gains, there has to be movement towards making operations, business and banking easier for this space.
Conclusion
The lessons learned from 2020 will certainly carry over with us to 2021 and perhaps for years to come. These changes in the payment industry evolved practically overnight and faster than anyone could have ever imagined in 2020. But one thing remained constant from before the pandemic and throughout the global crisis, customers still wanted speed, safety, convenience and security, and that is what contactless payments delivered.
Where will that lead us? Stay tuned for continued innovation, change and excitement in this space next year.
