The Rise of Digital Payments: Embracing Contactless Commerce
By James Phipps

Global Digital Transactions Set to Exceed $1 Trillion by 2025

In 2023, cash is no longer king. Digital payments have gone mainstream, providing businesses and customers unparalleled speed and convenience. As consumers flock to frictionless payment technologies, companies must adapt quickly or risk losing sales.

According to Business Insider Intelligence, global digital transaction volume is expected to balloon from $807 billion in 2020 to over $1.2 trillion by 2025. What is fueling this sharp uptick?

Contactless Payments Offer Superior Customer Service

Contactless payments like Apple Pay and Google Pay allow customers to tap or wave a card or smartphone to complete transactions seamlessly. A recent Mastercard study found that 79% of consumers prefer contactless payments for in-store purchases. Key benefits include:

  • Expedited checkout without PINs or signatures
  • Reduced touchpoints amid COVID-19 for safety
  • Streamlined experience and interactive receipts

“Contactless provides an essential layer of simplicity, security and convenience,” explained Jorn Lambert, EVP of Digital Solutions at Mastercard.

Contactless transactions under $100 accounted for over 20% of in-person Visa payments in Q4 2020, up from just 11% in 2019. This remarkable growth demonstrates how mainstream frictionless payment has become.

Mobile Wallets Achieve Mainstream Adoption

Mobile proximity payments alone are projected to grow 210% between 2021-2025 according to eMarketer. Mobile wallets like PayPal, Venmo and Square Cash are surging in popularity worldwide due to:

  • Secure encrypted transactions
  • Payment tracking and budgeting features
  • Transferring funds easily between parties

“Mobile wallets provide a unified experience for customers to manage finances and purchases on-the-go,” said Dan Schulman, President and CEO of PayPal.

The mobile wallet market is expected to reach $10.94 billion by 2026 according to Grand View Research. Driving factors include enhanced security like biometric authentication and stored virtual cards that don't expose details. Top players like Apple Pay, Google Pay and Samsung Pay are vying for consumer adoption worldwide.

Uniting Online and In-Store Commerce Environments

Omnichannel commerce blends physical and digital channels into one cohesive journey. Streamlined payment solutions that bridge in-person and online spaces are gaining traction.

For example, QR code payments let customers scan to pay from their smartphone. This contactless technology saw record adoption during the pandemic. Global QR code payment volume is estimated to reach $3.2 trillion by 2025 according to Juniper Research.

Leading payment processors like Visa are focused on omnichannel consistency. Visa's VP of product Kevin Phalen explained: “We are moving towards a world where the same Visa card can be used to shop in-store or online, leveraging strong identity authentication like biometrics for security.”

Preparing for Future Payment Innovation

Payment methods are evolving rapidly. Businesses must monitor trends and continually optimize to provide the ideal customer experience.

Upcoming advances like biometrics, blockchain, cryptocurrency and central bank digital currency (CBDC) will reshape commerce further. To stay ahead, merchants should partner with progressive payment providers focused on frictionless innovation.

Real-World Examples of Digital Payment Adoption

As an enterprise cloud services provider, we have witnessed the digital payment revolution firsthand through our business clients. More and more are adopting modern, mobile-friendly payment platforms.

For example, one of our engineering firms previously paid employees with paper checks. By switching to cloud accounting tools like QuickBooks Payroll, they can now pay staff digitally, saving time and postage costs. Workers also appreciate the convenience of direct deposit paychecks.

Local landscaping provider Zachery Robinson Lawn Care was still getting paid in cash or checks from residential clients. They recently rolled out Cash App as digital payment options. Customers embraced the ability to instantly pay for services from their smartphone. Zachery Robinson increased cashflow visibility and eliminated trips to the bank.

The Benefits of Migrating to Digital Payments

By transitioning from antiquated paper checks onto automated digital payment solutions, companies are modernizing back office financial operations. This enables faster payment cycles, cost savings, transparency, and convenience for all parties.

Preparing Your Business for the Future of Payments

The digital payments revolution is here. Companies that leverage user-friendly contactless technologies will be best positioned to unlock sales growth as cash fades into the past. By delivering speed, convenience and seamlessness, businesses can cater to contemporary consumer preferences.

The future of payments promises even greater choice, personalization and integration. Businesses must get on board with modernizing their finance workflows. Partnering with forward-thinking payment platforms makes this transition seamless even for small and midsize enterprises.

At BeCloud LLC, our goal is to equip clients for the digital-first world of tomorrow. Migrating off of paper checks onto streamlined digital payment processes is an important first step. Contact us today to discuss how we can accelerate your payment transformation.

James Phipps 13 August, 2023
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