Even as consumers have returned to in-person shopping, they aren't ready to give up the convenience of digital payments. Instead of returning to previous ways of paying, consumers are sticking with behaviors they picked up during the pandemic. They’re opting for digital payments over traditional cash and credit card options and it's a trend you can expect to see continue.
The checkout process is now one of the most important parts of the sales journey, but what does that mean for businesses? And, what trends can brands expect to see over the next 12 months?
Six payment trends to watch in 2023
1. Online and offline payment methods blend
Even as shoppers return to brick-and-mortar stores, they've changed the way they pay for goods and services.
Rather than going back to physical credit cards that require paper receipts, there’s now a preference for frictionless payment methods. These methods reduce the steps in the buying process and include mobile and digital wallets, one-click payments, auto-renewing subscriptions, and in-app payments.
Shoppers can now order ahead in-app and pick up curbside. This option of browsing online and purchasing something you can pick up and wear within the hour, allows consumers to pay how they want and still enjoy the immediacy of the brick-and-mortar experience.
Merging online and offline payment methods so customers can shop where they want when they want, will continue to be prevalent in 2023. Businesses processed $3.9 trillion in frictionless payments in 2020, a number that’s expected to increase to $8 trillion by 2024.
2. Creators can receive in-app tips from followers
The rise of digital payments has made it considerably easier for creators to get paid online. Instead of relying on product sales, affiliate marketing, and brand sponsorships, social media creators will be able to get paid directly through their chosen app by their followers. TikTok has a tipping feature for accounts with over 100,000 followers. As a Twitch affiliate you can receive donations on your streams via Twitch Bits, a form of virtual currency.
These types of features allow consumers to continue the in-feed experience while creators, influencers, and small businesses can generate revenue. Influencers can receive tips without losing a cut of their money to a third party.
3. Digital wallets are the norm
Apple Pay, Google Pay, Shop Pay, and other digital wallet options are now a common fixture alongside other traditional payment options at the checkout counter. If you don't give customers the option to use a digital wallet, you're limiting the ways they can pay you.
Paying by phone has become a convenient way for shoppers to make purchases in an instant, whether they’re in-store or buying online. More than four billion global consumers will shop using their digital wallets by 2023. Digital wallet customers will exceed 1.6 billion at POS (point of sale) in 2023. That'll account for 30% of all POS payments.
4. Payment apps are the new lifestyle apps
Consumers now rely on their phones for pretty much everything, from ordering an Uber to booking dinner reservations to monitoring their blood glucose levels. As a result, expect to see a wave of “super apps” popping up. These apps act as a portal to a number of different virtual products and services.
BlackBerry founder Mike Lazaridis was the first to use the term, defining it as “a closed ecosystem of many apps that people would use every day because they offer such a seamless, integrated, contextualized, and efficient experience.”
China’s popular WeChat app is a prime example. It started off as a simple messaging app, but now offers a collection of services including taxi rides, virtual wallets, hotel reservations, games, and even medical consultations.
In 2023, expect to see more of these super apps emerging with key payment features like buy now, pay later (BNPL) programs, which let consumers pay off purchases in monthly installments, and flexible payment methods.
5. More buy now, pay later (BNPL) companies
BNPL (buy now, pay later) has exploded over the past couple of years. Financial uncertainty during the pandemic led to an influx of apps that let consumers spread payments out across monthly installments–and it was a win for both brands and shoppers. Brands are able to convert more customers by promising lower initial payments and shoppers can invest in higher-priced products without breaking the bank.
BNPL payments are expected to account for roughly 24% of ecommerce transactions by 2026 (up from 9% in 2021), and 65% of merchants added BNPL as a payment method in 2022. It’s clear to see how popular this payment method is through the sheer number of BNPL companies that have emerged over the past two years–apps like Affirm, Klarna, and Afterpay. Companies that are all competing with digital payments pioneer PayPal.
Case in point, Charlotte Tilbury offers shoppers the chance to pay in installments via Klarna. The company explains how the process works in a step-by-step guide to increase transparency and customer trust.
6. QR codes are commonplace
QR codes seemed to die out years before the pandemic, only to come back with a vengeance when brands and venues were trying to limit the amount of cross-contamination through money, tickets, and receipts.
Now, QR codes are prevalent in a number of settings, including restaurants, where diners can scan a code to view the menu, place an order, and pay for their meal without waiting for a server, and physical stores, where shoppers can unlock discounts and extra product lines by simply scanning a QR code. Decathlon’s “Scan & Go” app allows shoppers to skip long queues by scanning a QR code in store and getting products delivered directly to their door.
QR code payment users are expected to exceed 2.2 billion by 2025, equating to 29% of all mobile phone users globally.
These digital payment trends are here to stay
More and more people trust digital payments and see them as an easy way to buy. Buyers who never considered using a digital app to pay for their lunch are now using smartphones to pay without a second thought. In 2023, consumers will expect businesses to give them options when they pay. And, expect to see more payment methods as consumer needs change and businesses adapt to meet those needs.
Payment trends FAQ
What payment trend should businesses implement now?
Digital wallets are secure and give consumers additional options when they pay for goods and services. If your business isn’t accepting digital wallet payments you might be losing out on sales.
Why should a business use QR codes?
QR codes make it easier for your customers to get the information they need quickly and can save you money on printing costs while being hygienic.
How are some ways to use QR codes?
- To view menu options
- To order or choose items
- For contactless payments
What are some benefits of investing in a buy now, pay later (BNPL) program?
- Convert browsers into buyers
- Meet your customers where they are
- Learn your customers’ likes and dislikes
- Create relationships with buyers interested in investing in your brand