Bartering. Gold. Cash. Credit. Payments have come a long way over the course of history – and payment processes aren’t done evolving. New options are coming onto the scene, and changes are making some old options better than they used to be.
Here are four payment changes to expect in the coming year.
Prediction #1: Checks Will Continue Their Slow Vanishing Act
The Federal Reserve Payments Study says that ACH debit transfer outnumbered check payments for the first time in 2018. The Federal Reserve Bank of San Francisco says that checks accounted for 5% of payments in 2019, down from 7% in 2016.
Some people still write checks, but this payment method is becoming less and less common as younger generations grow up with faster and easier options. Although checks probably won’t disappear entirely this year, we can expect their slow vanishing act to continue.
Prediction #2: Payments Will Get Faster
The internet has changed the way people think about speed. Delivering a letter across the country in 10 days might have seemed good in the days of the Pony Express, but now we expect emails to arrive instantaneously.
People are getting more impatient. According to StudyFinds, a survey found that people now get frustrated after waiting 16 seconds for a webpage to load or 22 seconds for a movie to start streaming. Many of those surveyed believe that digital technology is at the root of the growing lack of patience.
People think of digital transactions as instant, so they get frustrated when they have to wait. This includes payments. According to the U.S. Faster Payments Forecast: The Volume Begins to Build, adoption of real-time payments accelerated during 2020 in the U.S. Since people aren’t getting any more patient, this trend will likely continue in 2021.
Prediction #3: Contactless Payments Will Catch On
The COVID-19 pandemic has made people more aware of the potentially germ-covered surfaces they touch every day. Contactless payment reduce the surfaces people need to touch, and they’ve been catching on.
ComputerWeekly reports that the UK is nearly doubling the limit on contactless card payments, allowing consumers to spend £100 in a single contactless payment. When contactless cards were introduced in 2007, the spending limit was £10.
Prediction #4: Digital Payments Will Go Both Ways
Consumers often make payments using digital tools. Now they’re starting to receive funds using digital tools as well.
According to Payments Journal, a recent survey found that 42% of consumers are more likely to stay with an insurance company that can pay approved claims within minutes, and many policyholders would switch insurers to gain access to real-time payments.
People don’t enjoy waiting for money that’s owed to them. More and more, digital claims payments will be an essential aspect of customer satisfaction and loyalty.
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