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Consumer Trends in Payment Preferences

June 18, 2024

The world we live and work in is constantly changing when it comes to advancements in technology. This shift is particularly evident when it comes to consumer payment preferences. Consumer behavior and preferences can be the difference between a business winning a customer for life, or souring the customer on their experience and they never choose to do business with the establishment again. Businesses can stay ahead of the game by keeping up with the trends in customer expectations and can stay competitive by adopting some of the trends in consumer payment preferences. Here are seven trends that are driving the future of transactions. 

Enhanced Security Features

More and more stories seem to be coming up in the news about the latest breach. Just recently we have heard about a major telecommunications company being affected by a breach, and a national health system also suffering a significant attack.

Consumers prioritize and value security – particularly when using personally sensitive information during a transaction. Offering options that include biometric authentication, tokenization, and encryption. These types of increased security measures will not only protect consumers from fraud, but it will build confidence in digital payment technology with customers.  

Voice-Activated Payments 

 “Hey Alexa” is a phrase that is now stated in 100 million homes, according to an article from early 2024. As voice-enabled technology continues to grow, so does the emergence of voice-activated payments because of the immense growth of smart speakers and virtual assistants. These systems let consumers make purchases using voice commands, which provides a hands-free, convenient experience.

As technology improves and adapts to the consumer preferences, voice-activated payments are expected to drive the advancement of the overall payment experience.

Digital Wallets

Tired of reaching into your pocket to pull out your wallet, grab a credit card, and swipe it through the card reader? Yeah, same.

Digital wallets, like Venmo, PayPal, and Zelle have grown in popularity due to the remarkable ease of use when it comes to transferring money to other people or paying for goods and services from a business. The simplicity of linking bank accounts or credit cards to digital wallets has made them an easy-to-use solution, but also helps to reinforce trust in digital payment methods.

Contactless Payments 

Contactless payments have been a trend that the consumer base was heading toward for some time prior to the COVID-19 pandemic. Some of the societal behaviors that developed during the pandemic, like contactless payments, were put on the highway to adoption.

Realizing the benefits, and enhanced simplicity, contactless payments is a trend that has stuck around and become mainstream. Now, consumers appreciate the enhanced experience and ease of tapping a card or mobile device to complete transactions. Businesses that are still hesitant to adopt this solution are missing out on a growing number of consumers that enjoy this option.

Buy Now, Pay Later Services (BNPL)

Have you ever been shopping online for clothes, and after selecting a couple of pieces, you go to checkout in your shopping cart, and you see an option to pay with Afterpay or Klarna? These services are called Buy Now, Pay Later, or BNPL, and they allow consumers to split purchases into manageable installments that are often interest free.

These services offer an alternative to credit cards, which makes the payment more manageable for consumers while driving higher sales and improved customer satisfaction. The simplicity and added option provide another alternative that consumers can use when paying for goods and services.

Mobile Payments

Mobile payments have seen incredible growth due in large part to the number of consumers walking around with a smart device as their mobile phone. Smartphones have transformed the speed and convenience that consumers have now when it comes to making purchases. In a matter of a few clicks, a consumer can purchase a full week’s worth of groceries and have them scheduled for delivery to their home. Mobile payments fuel this convenience and confidence that consumers now have in mobile payments. This trend is one that businesses have fully adopted and have integrated with loyalty programs to help further the appeal of mobile payments.

Crypto Payments

Cryptocurrency has largely been used as an investment but is starting to gain traction as a viable payment method. Some companies have been accepting cryptocurrency – which could be a sign of this trend becoming more popular with businesses. Some consumers are intrigued by the security and decentralization of cryptocurrency; however, the volatility and regulation obstacles remain present. So, while this trend does see some slow adoption, it will be worth paying attention if more and more businesses look to accept cryptocurrency as a form of payment.

Consumer payment preferences change rapidly. This landscape shifts quickly and is influenced by technological advancements and consumer expectations. Businesses must adapt and adopt some of these trends to remain relevant and competitive with customers. Staying ahead of these trends will help your business deliver an innovative and streamlined customer experience. The best way to help your business remain competitive is to engage with a trusted and knowledgeable payments professional that stays informed about these trends and is successful in implementing them with businesses that are looking to grow.