Chasing the perfect payment, by Richard Carter
2024 will be the year tap-to-pay technology becomes truly embedded in the way small businesses and sole traders take payments.
Millions of people already manage their entire lives through their smartphones, so for mobile devices to become the primary way we pay for things seems like a natural evolution.
The change is already underway. Official data from UK Finance shows that in 2022 30% of adults were registered with at least one mobile payment service. With that figure climbing to more than half among the under-35s.
Next year we’ll see the technology be embraced beyond these primarily young early adopters. For consumers, the ease of paying for things by just tapping their phone onto a merchant’s phone makes the appeal of tap-to-pay obvious.
But we’ll also see a big shift among businesses, for whom tap-to-pay removes the need for cash, cards, card readers or tills, reducing their costs and streamlining the sales process.
It also removes barriers for businesses who have traditionally only taken cash. Now, with just a mobile phone, anyone can accept contactless payments, wherever they are, in a matter of seconds.
Innovations in digital payments
Loyalty and reward programmes have lagged behind payment technology for too long. While customers now have a choice of easy, instant ways to pay for things in person, collecting rewards sometimes feels a little more sophisticated than the old paper cards that you used to get stamped with each purchase.
In future, loyalty programmes will run on tech that streamlines business processes, eliminates customer friction and integrates rewards into every sale. Some payment terminals and card transactions already showcase this with automatic cashback and offers directly sent to users’ accounts. And this is where we can expect to see more innovation.
There’s also a shift towards rewarding businesses. And payment providers are increasingly issuing cards that enable businesses to spend their income immediately, while also offering them the opportunity to add rewards, cashback and offers to these payments. With a good payment provider, a merchant can get savings when they earn money and rewards when they spend it.
Does the perfect payment exist?
The short and simple answer is no.
While we can certainly process payments faster and more efficiently, there will always be opportunities to add more value to products.
Innovation that doesn’t enhance the user experience will quickly fade out. While anything that makes payments work better for everyone will continue to flourish.
The shift from cash payments to cards is a prime example of how quickly behaviours can evolve. We should expect further dramatic changes in the future.
Richard Carter is the founder and chief executive officer of Lopay.