As consumers become more keen on adopting the latest payment methods, companies must innovate their payment acceptance strategies to meet them where they are.
A recent report from U.S. Bank looked to gauge just how prepared U.S. organizations are by polling 300 senior finance, treasury, and revenue management executives from various industries, including retail, healthcare, and government. It found that while many executives are aware of just how critical offering the latest payment methods is to differentiate themselves from competition, the strategies they’re using to expand the range of payment options offered—and the technologies they’re investing in—varies depending on the industry.
The Changing Payment Method Landscape
Many consumers prefer using their physical card or cash to make a payment. In fact, 58% of respondents said consumers prefer to pay via cash today. Fewer respondents (10%) believe this will be the case the next two years. Where they do expect to see significant change in payment methods is in the use of contactless and digital wallets. When looking at respondents by sector, 72% of respondents in the state & local government sector said they expect contactless card payments will be the preferred method of payment in the next two years. That’s an increase from the 18% of respondents in that particular sector who believe it’s the preferred form of payment now. And across the board, regardless of sector, respondents expect consumers to gravitate to contactless card payment, as well as digital wallets.
BNPL, Zelle, and Overall Flexibility
The surge in digital payments among consumers is driven by the need for convenience, and financial executives across all industries are already looking at ways to incorporate new technologies and even consider payment methods they initially didn’t as a way to meet consumers where they are.
For example, respondents in the retail sector from the U.S. Bank report said they expect buy now, pay later (BNPL) payment methods to be more widespread in the near future, and as a result, are looking to further invest in the space. Similarly, after seeing how Gen Z shops—a group that holds a lot of spending power—and their want for more online experiences, many respondents in the retail sector also said they’ll be experimenting in the metaverse and enabling transactions there.
Meanwhile, in the restaurant sector, respondents are seeing an increased demand from diners of using cryptocurrency and peer-to-peer (P2P) payments, in addition to mobile wallets. And respondents in the healthcare sector said they’re looking to accepting PayPal, Zelle, and Venmo, as another way to meet consumers where they are—in the form of “increasing access to patient financing.”
As businesses invest more heavily on their payment acceptance capabilities, they are positioning themselves for more growth and more opportunities.
Speaking to Businesswire, Jamie Walker, CEO of Elavon said, “By embracing the convenient payment processing options desired by consumers, large businesses and government agencies can get paid more quickly. We found that across all sectors, more than 75% of financial leaders are relying on payments transformation to feed into greater sales and greater profitability for their organization.”
