Money transactions and payment methods have been evolving for the last decade at a rapid speed. As a result of this, people are beginning to expect quicker, safer, and more convenient options.
You can pay with just a tap of a card or phone, or even through a digital wallet using modern and innovative payment systems and cryptocurrency systems.
Taking into account these transformations, businesses should attempt to stay ahead and catch up to new systems. Organizations can overcome competition if they start adapting to new and innovative payment systems.
It is possible that if a checkout process were outdated, consumers would take their business elsewhere. This pattern applies to all elements of business.
Where modern businesses fail to offer newer and more modern solutions, they risk losing consumers. In this piece, we’ll be looking at the particular new innovations that companies must adopt.
The Rising Prominence of Innovative Payment Systems: Biometric Authentication
Using unique physical traits like fingerprints, facial recognition, or iris scans to verify identity is emerging as a powerful tool for payment authentication and fraud prevention.
Unlike passwords that can be hacked or payment cards that can be stolen, biometric identifiers are irreplicably tied to each individual.
This biometric payment technology delivers major security and convenience benefits:
- Increased security by tying payments to the user’s actual physical identity
- Reduced fraud risk from lost/stolen cards or passwords
- Seamless, frictionless user experience to complete transactions
Major companies are quickly embracing biometrics as a fraud-busting payment solution. Amazon now allows customers to pay for groceries at Whole Foods simply by scanning their palm print.
Other retailers, like Calgreen and Wallgreens, are rolling out similar biometric checkout options. The numbers back up biometrics’ soaring popularity.
In 2022, it was already a massive $42.9 billion industry. Experts predict that number is going to nearly double within just five years, skyrocketing to $82.9 billion by 2027. That’s an annual growth rate of 14.1%
Cryptocurrency and Blockchain enable Decentralized Global Payments
While cryptocurrency burst into the mainstream as a digital investment asset, it also represents a revolutionary new model for global payments and financial transactions.
Cryptocurrencies like Bitcoin, Ethereum, and over 10,000 others leverage blockchain technology to enable fast, secure peer-to-peer payments without third-party intermediaries.
Major companies are already capitalizing on crypto’s payment potential.
- Microsoft accepts Bitcoin for purchases across its Xbox and Windows stores
- Starbucks allows customers to reload gift cards and make purchases with cryptocurrency
- Paypal has allowed users to buy, hold, and pay with cryptocurrency since 2020
While volatility remains an issue, crypto and blockchain are rapidly evolving as viable mainstream and innovative payment methods for a decentralized global economy.
Surging Popularity of “Buy Now, Pay Later” Financing
One of the fastest-growing trends in fintech is point-of-sale installation, which lets shoppers pay for purchases in interest-free installments over time.
Solutions like Affirm, Afterpay, and Klarna have seen phenomenal adoption by offering payment flexibility without the risks of credit card debt.
This “buy now, pay later” model is booming in popularity, especially among millennial and Gen Z consumers.
Key drivers behind BNPL’s meteoric rise include:
- Paying over time to reduce friction and boost conversions
- Meeting young shoppers’ debt-averse preference for credit alternatives
- E-commerce growth amplifies the need for seamless online payment options
For merchants, easy integration of BNPL solutions can instantly boost sales conversions by removing upfront payment hurdles.
According to one study, the top 100 online BNPL providers already facilitate over $680 billion in transactions annually.
Projections indicate that this installment payment approach will only grow more ubiquitous. In 2024, the total value of BNPL transactions is projected to hit $334 billion globally.
That’s already a staggering figure. But fast forward just four more years to 2028, and experts predict that number is going to more than double to a whopping $687 billion.
Some critics caution about the risks of encouraging what they see as unhealthy levels of consumer debt. However, as long as protections remain in place to promote responsible lending, the demand for flexible payment options positions BNPL as a likely payment game-changer.
The Payments Frontier Keeps Expanding
While innovative payment methods like using your fingerprint or face to authenticate payments and paying with cryptocurrencies like Bitcoin may still seem like sci-fi concepts, more and more businesses are already jumping on these trends.
They’re profiting by implementing these futuristic but disruptive new payment approaches. Cashless payments are skyrocketing in popularity and mobile shopping is rapidly increasing in popularity.
As a result, customers get seamless and secure new ways to checkout. This will only become more crucial for businesses in the coming years.
The accelerated pace by which payment tech is advancing, there is no sign of it letting up anytime soon. Payment innovations that seemed completely far-fetched and unrealistic just a couple of years ago are rapidly materializing into real-world payment solutions used today.
In our digitally-driven era of game-changing payment experiences, the biggest risk companies face is being too sluggish to take advantage of the payment breakthroughs revolutionizing the entire landscape.
