Following the outbreak of the Covid-19 pandemic, consumers have become more tech savvy and concerned with safety. They are adopting new payment technologies and innovations to stay safe and shop efficiently. Retailers have the opportunity to use these technologies to give themselves a competitive edge.

Here are some of the payment innovations and trends retailers should be prepared for in 2021.


1) Contactless payments

Contactless payment technology has been around since 2007 but the use of the technology expedited during the pandemic due to the safety and convenience it offers. The global digital payments industry was growing at 16% year on year pre pandemic, which increased to 22% when the pandemic hit.

As a result, the industry is expected to be worth $6.6 trillion in 2021. Moreover, half of the world’s population – 4 billion– is expected to use digital wallet by 2024 which is a steep increase from the 2.3 billion users in 2019.

46% of global consumers believe contactless payments to be one of the most important safety measures in physical stores. That, along with convenience, are the reasons why over half of all consumers are willing to avoid stores that do not offer contactless payments.

According to a report by Visa, 75% of in-store payments in Europe are now contactless; and in the UK it’s 83%. During the pandemic the limit on contactless spend in the UK was increased from £35 to £45 which helped the growth of the technology.


2) Buy now, pay later

Many retailers are offering buy now, pay later (BNPL) options with the help of companies like Klarna, Afterpay, Quadpay and more; and consumers are increasingly taking advantage of the offer. In the USA, for example, the use of BNPL services increased from 38% to 56% from 2019 and 2020. Thus, McKinsey predicts these companies to generate around $4 – $6 billion in revenue by 2023, excluding revenue from other products they will cross-sell.

It is in the interest of retailers to quickly adopt BNPL services as the benefits are great: McKinsey found BNPL service users to have higher affinity and engagement, resulting in higher repeat usage; Klarna also reported a 30% increase in checkout conversion rates and a 58% higher basket size; and Afterpay reported a decline in returns and refunds of 8% to 18%.


3) QR codes

QR codes are being placed everywhere to limit contact and provide a seamless omnichannel experience. Consumers are welcoming the technology; for instance, influencers are promoting products on social media with QR codes which takes the consumers directly to the shopping cart, making the shopping experience quick and easy.

China is ahead of the west with this innovation as 85% of Chinese consumers have used QR codes to pay in 2020. But not for long, since Juniper Research projects 27% of all digital transactions will be made with QR codes by 2024.


4) Biometric

Biometric payment options allow consumers to make payments using fingerprint scanners, facial recognition, iris recognition, voice recognition, heartbeat analysis, vain mapping and more. In the UK, 54% of consumers are reportedly ready to use biometric payment systems; and in Europe, 11% of consumers have already used the technology at least once.

Amazon and Google are some of the pioneers of this technology: Amazon One, which has been tested in Amazon Go stores, analyses the unique configuration of veins under the skin of the user’s palm, allowing them to pay by waving their hand at the reader; similarly, Google app allows consumers to pay by saying “I’ll pay with Google”.

The accuracy, efficiency and security offered by biometric payment options is making the technology increasingly popular among consumers, particularly the tech savvy millennials and gen z’s. 1,000 convenience stores had already adopted facial recognition payment system in China by 2019, with more than 100 million consumers registered.


5) Integrated payment

Integrated payment systems refer to technology which connects payments and software to automate the payment process for consumers. Payment is not an extra step, rather integrated in the shopping process, creating a seamless checkout experience.

Uber is a classic example as the payment is automatically taken from the customer. More recently, Amazon Go customers are able to walk out of stores with products and payment is automated via the app.

Accenture reports, 50% of adults are comfortable with this technology and are happy to allow payments to be made on their behalf. Thus, this technology will continue to grow – ALDI is among the latest retailer to test integrated payment systems.


6) Crypto currency

The pandemic saw the popularity of cryptocurrencies grow and prominent businesses- such as Amazon, Lush, and Microsoft- accept digital currencies as payment for goods and services.

Though only 5% of consumers in Europe have used cryptocurrencies to pay for retail products, it is expected to increase as more people purchase cryptocurrencies and retailers start to advertise their acceptance of the coins.

At present, 25% of retailers offer crypto payment options but in the next 18 months, this is expected to increase to 49%, almost half of all retailers.




In summary, these payment technologies and innovations will help consumers feel safer and improve customer experience. Therefore, retailers should implement as many of these as possible in order to stay competitive.



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