Consumers now have more ways to interact with businesses than ever before, depending on their immediate needs. Making payments is no exception, and many people are taking advantage of the increased options that new technologies provide.
In fact, according to new research, the balance of power has shifted between organizations and customers to the extent that payment innovation is now led more by consumers than industry.
The How America Pays 2016 study has revealed a number of eye-opening insights into the country’s desire for more flexible and convenient payments across multiple channels.
But what is spurring this consumer revolution in payments? And what can organizations do to keep abreast of the latest industry developments?
Consumers embracing change
Blackhawk Network, the company that compiled the How America Pays results, revealed that alternative payment methods experienced significant growth over the last year.
Mobile wallet adoption enjoyed an eight per cent rise, with 80 per cent of respondents claiming they use these services the same or more than in 2015. Meanwhile, 73 per cent of people said they had either maintained or increased their person-to-person (P2P) payment usage over the same time period.
One-third of the smartphone users that were polled reported using a mobile wallet, although P2P adoption was notably lower at six per cent. Nevertheless, appetite for different payment choices is high.
Traditional channels still popular
Despite growth in online and mobile channels, traditional options remain popular among consumers. Cash is still the most prevalent transaction method, with 87 per cent of people using this form of payment within the last year.
Debit and credit cards clinched second and third place after receiving 75 and 69 per cent of the vote, respectively. Furthermore, 60 per cent of people used checks over the last 12 months, although this had dropped from 68 per cent in the previous year.
The research suggests that while alternative payments are gaining momentum in the US, support for traditional methods should remain strong for the foreseeable future.
Payments influencing brand loyalty
Unsurprisingly, businesses that provide more payment options to customers can expect to see a rise in satisfaction levels.
Seventy-eight per cent of people claimed their payment experience affects their perception of a website and could impact whether or not they visit again. Nearly 70 per cent said the same about in-store or restaurant transactions.
“The role of payments in Americans’ lives is increasing in importance,” said senior vice-president of products and marketing at Blackhawk Network David Tate.
“Consumers now have so many payment tools at their disposal; they can be selective about how they pay, and are even influenced on where to shop based on their experiences paying.”
How can organizations meet consumer demands?
Clearly, consumers are becoming increasingly versatile in their payment behavior and needs. Financial institutions (FIs) and merchants must therefore provide services that facilitate an array of payment options, whether it’s via cash, card, online or mobile.
Given that customers place increased importance on flexible payments, organizations need to deliver an omnichannel experience that enables people to choose the ideal transaction method that best caters to their requirements.
FIs and retailers that achieve the right balance can expect increased brand loyalty, higher transaction levels and more seamless customer experiences.