The financial sector has changed dramatically over the past decade, and for businesses that want to remain ahead of the curve, it’s important to understand what the future may hold. By identifying changes early on, it’s much easier to adapt, incorporating adjustments without any “hiccups” in your own revenue stream. If you want to help your business stay competitive, here are five evolving payment processing trends for 2020 that you need to be aware of.
1. Increased Demand for Peer-to-Peer Payments
While it might be enough for some businesses to offer only credit cards (and maybe ACH push and pull transactions) for the customers, to keep pace with emerging trends, you might want to add peer-to-peer (p2p) payments to your list of payment options.
While p2p platforms were initially launched to allow two (or more) people to transfer funds to and from each other, plenty of customers use the systems to pay for purchases, too.
In fact, more than 82 million people use p2p as a primary payment option in the U.S. Cash AppTM, VenmoTM and ZelleTM are all popular p2p payment options, especially among younger customers. Recently, PayPalTM introduced its own p2p platform, PayPal.MeTM, to “cash in” on the popularity of p2p systems.
There’s no doubt convenience is a major driver when it comes to online shopping. By offering p2p payments, you let customers choose the payment system they like best, a smart move that can increase loyalty and grow your revenue.
2. Improvements in “Built-In” Security
Security and fraud prevention were at the top of emerging trends in 2019, and they continue to be of paramount concern and importance in 2020. This year, there will be a major push to improve security using artificial intelligence to identify and thwart cyber attacks, phishing and security breaches.
Many online payment processing systems are deploying technology that uses fraud and breach data to provide important business insights that can help identify fraudulent transactions before they occur, pinpointing “cracks” in payment systems that could result in potential breaches.
Not only are these efforts important for preventing revenue losses, but they’re also critical as a “goodwill” effort aimed at helping customers feel more secure when using your website and making purchases. As the leading provider in payment processing solutions, security and encryption is Payline’s top priority. Discover more about how our PCI compliance protects you from potential threats.
3. Rise of Gen Z
Baby boomers in retirement or nearing retirement may have more disposable income to direct toward purchases. But it’s millennials and Generation Z that will be determining the future of many businesses.
These two generations represent roughly $350 billion in spending power in the U.S. Generation Z alone comprises about 40% of consumers globally. These are generations that have grown up with the internet, and for whom digital technology is second nature.
Without a doubt, millennials and Gen Z will be driving the shift in payment processing for businesses of all types and all sizes. To appeal to these potential customers, businesses need to ensure their platform is simple, streamlined and flexible, providing a truly frictionless experience that’s as accessible on mobile devices as it is on the web.
4. Uptick in Regulations
For 2020 and probably years to come, the rules surrounding online payments will continue to become more complex as federal, state and local government regulators look for ways to increase protections for both consumers and businesses.
Some of these rules impact the way payments are processed and the notifications provided to consumers who use websites to make purchases. Others affect the collection of sales tax for companies that do business across state borders.
The introduction of new regulations is almost constant, and that means businesses need to be vigilant in keeping up with — and adapting to — current rules that apply to their business, their customers, and the products or services they’re selling.
5. Outdated Tech Won’t be Able to Keep Up
Even when businesses are willing to incorporate new payment methods and fraud technology, outdated technology may prevent them from doing so. Payline uses State-of-the-art payment processing systems that are more convenient and secure than ever. It requires up-to-date hardware and networking systems capable of handling your data and functional needs.
That means that to stay abreast of all these changes, many small and medium-sized businesses (and even some larger one) will need to overhaul their existing technology systems and hire additional tech support. While investing in a new tech system can help solve this particular problem, it’s a solution that requires a lot of revenue.
Many smaller businesses may find themselves hampered by their inability to launch updated hardware and software solutions on their own, making third-party payment processing systems an attractive and budget-friendly option.
Staying ahead of payment processing trends for 2020 and beyond is a lot of work, but without a complete understanding, it can be difficult to know how to assess marketing efforts and buying strategies for optimal returns.
For businesses that aren’t prepared, it can mean an ongoing game of “catch-up,” as well as a loss of critical revenue streams. Investing in a comprehensive payment processing system such as Payline is a smart way for businesses of all sizes to adapt to emerging payment processing trends in 2020 without overextending their own existing resources.