The Key Payment Innovations Impacting Retailers
Three trends are reshaping retailers' payment experience today
Customers are increasingly turning away from paying via physical cards in favor of contactless payments, which allow them to pay for purchases by tapping their mobile device — such as a smartphone or smartwatch — tapping their card, or checking out by scanning a QR code.
of Americans now use some form of contactless payment. 2
Digital wallets, such as Apple Pay and Google Pay, have also been embraced by consumers looking to make purchases without presenting a physical card. Nearly half (49.4%) of U.S. consumers now use a digital wallet — a figure that rises significantly among younger shoppers and consumers with higher incomes. 3
Gen Z - 78.9%
Millennials - 66.7%
Gen X - 43.7%
Boomers and seniors - 25.7% 4
Less than $50,000 - 41.2%
50,000 to 100,000 - 51.4%
More than $100,000 - 54.7% 5
Contactless payments offer a faster and more convenient way to pay anytime, anywhere, with a device that’s likely already in a consumer's pocket or a card that doesn't have to be inserted or swiped.
Accepting contactless payments can keep the checkout lines moving, too — even during busy times like the holiday season. This can lower stress for employees and customers alike. With a portable POS solution that accepts contactless payments, such as Tap to Pay on iPhone, retailers also allow shoppers to check out anywhere in the store, rather than having to wait in line. Plus, digital wallets provide an additional layer of security for customers’ payment information. Digital wallets allow shoppers to make purchases without sharing their payment information with retailers directly — and, as a result, if retailers suffer a data breach, customers’ information will remain safe.
at retailers than non-users, with an average retail spend of $95 per transaction. 6
Start taking contactless payments at your store via iPhone in just four easy steps.
Once thought of as a financing solution for big-ticket items, buy now, pay later is now entrenched in many consumers’ lives. This is especially true among younger shoppers, some of whom have made buy-now, pay-later options like Afterpay their lending solution of choice.
The ability to finance purchases, large and small, offers advantages for consumers. The biggest benefit may be greater control over their cash flow: With the ability to pay for purchases over time, shoppers have more options to buy what they need even if their paychecks aren't steady. Also, as the cost of living continues to increase, buy now, pay later can bring luxury goods within reach for a broader range of consumers and help shoppers make the most of their discretionary incomes.
Buy-now, pay-later spending on grills, patio furniture, and other outdoor goods increased 368% from 2022 to 2023
Small-ticket items, like trash bags, blushes, and bronzers were among the fastest-growing purchases using buy-now, pay later from 2022 to 2023
Although other categories have overtaken apparel — once the top spending category for buy now, pay later — items including pants and shoes still saw an increase in buy now, pay later spending from 2022 to 2023. 7
Customers today expect retailers to be ready for anything when it comes to payment — whether that's online or in-store, or the increasingly blurry line between the two.
When it comes to eCommerce, customers want the same flexibility they’d receive in-store. This means retailers must adopt flexible solutions that allow customers to pay using their preferred method, whether that’s a debit card, credit card, mobile wallet, buy now, pay later, or something else entirely.
say they regularly use buy online, pick up in-store services. 8
The eCommerce checkout experience now extends to customers who prefer to pick up their goods in store. For today’s shoppers, an seamless experience has become the norm: Buy online, pick up in-store (BOPIS) purchases accounted for $113.19 billion in sales across the U.S. in 2023, representing just over 10% of eCommerce sales, according to research conducted by Capital One. And the same study found that BOPIS sales are expected to grow by nearly 17% annually between 2023 and 2030, outpacing total eCommerce growth by 43%. 9
have made an additional purchase when they picked up an order in-store. 10
As shoppers continue to merge their online and in-store shopping habits, brands should seek out opportunities to create a seamless experience. Seeking out a unified payment platform — one that combines payments with additional capabilities, like inventory management and customer loyalty programs — can help retailers coordinate across businesses to deliver services like BOPIS successfully.
