Each year, Vantiv and MercatorAdvisory Group conduct research into consumer attitudes about the changingpayments landscape and distill the findings into 10 key trends, which aresummarized for you below.
1.Omnicommerce Takes Hold Theinfrastructure for omnicommerce is falling into place, as 9 out of 10 consumersresearch and/or buy products online, 8 out of 10 bank online, and 6 out of 10use their mobile phones to help them shop. Merchants and financial institutionsneed to meet these consumers in the channels of their choice.
2.More Omniconsumers, More Expectations Moreconsumers are becoming omniconsumers. About 4 in 10 consult their phones forcomparison shopping at a retailer, and 1 in 5 often do so and then buy onlineor at another store. Even at home, consumers use an average of 3.5 electronicdevices at the same time—underscoring the competition for omniconsumers’attention.
3.E-Commerce: Popular, with Room forImprovement Onlinee-commerce is now the most common way toshop for higher-value items, with 57% ofconsumers regularly doing so. But manyare running into problems with the fundamentals of online retailing from a lackof one-click checkout to difficult-to-navigate checkout processes.
4.Mobile Inroads at the Point of Sale In-storemobile payments usage has grown significantly, with POS tablets now used by 33%of consumers, up from 19% last year. Interest in using mobile payments is high—especiallyif they are part of an overall solution that provides rewards and discounts andhelps organize cards and receipts.
5.Mobile Payments: Still Unfolding Althoughmobile payment usage is up, awareness of mobile payment methods is down—but thatis likely temporary. Overall, 70% of consumers expect to use mobile payments atsome point, and key segments— such as young and affluent consumers—have a muchhigher awareness of mobile payments.
6.Loyalty, Rewards, and the Mobile Opportunity Seventy-threepercent of consumers carry loyalty cards, and on average, they carry 3.7 cards.More than 4 in 10 consumers would switch payment methods to get a discount orrewards. By enabling consumers to consolidate loyalty cards and rewards intomobile offerings, companies have an opportunity to grow program participation.
7.Smaller Merchants: Moving Forward Smallermerchants are adapting to a changing world, and 69% said that omnicommerce is agrowing company interest. However, they were about one-third less likely thanconsumers to find fault with the online experience, suggesting that theyunderestimate the problems that consumers encounter at their sites.
8.Prepaid: Broadening Its Reach Prepaidcards now appeal to more types of consumers, including the young, thetech-savvy, and both higher- and lower-income consumers. Consumers value themas budget management tools and for security; 29% plan to use them to replacedebit accounts.
9.Change in a Competitive Landscape Manyexecutives are worried about keeping up with technologies and competitors asconsumers look for innovation; some may not be ready. ISOs see technologyofferings as key, but only 25% offer omnicommerce-related services, suggestinga need to build or source capabilities.
10.Coping with High-Profile Security Issues Inthe past year, 16% of consumers received unauthorized charges due to a stolenaccount number. Still, cards are considered more secure than all emergingpayments. And anxiety about security declined, as fewer consumers now thinkabout security when conducting transactions.
TheTakeaway: Change is thenew normal for payments. This year’sresearch uncovered a shift away from the wait-and-see mind-set and towardtaking action. Many in the industry are implementing new programs, piloting newtechnologies, and collaborating with their ecosystems of partners to moveforward.
For more information about the trends described in thisarticle, download Vantiv’s Top10 Payment Trends to Watch in 2014 white paper.
LorenaHarris is vice president of corporate marketing at Vantiv, where she leads theVantiv Insights Research program. For more insights, visit vantiv.com/research.
Vantivis a leading integrated provider of payment processing strategies and advancedtechnology solutions for businesses and financial institutions. For 40 years,our team of committed professionals has made us one of the most trusted andrespected organizations in the payment processing industry. We’ve driven manyof the changes that prompted the shift from cash to electronic payments, andthat innovative spirit continues to be our strength. We’re innovators, thoughtleaders, boundary pushers. Vantiv is changing the face of payments.
