The financial community has seen an increase in electronic methods of managing money including bill pay, digital wallets, online banking use, ATM usage, and much more over the past several years. The use of cash has declined as these electronic options have become more and more available. In fact, research has also found that 34-40% of adults under the age of 50 do not make any cash purchases in a typical week.
In-branch banking has also declined drastically as consumers have found new ways to perform their needed transactions such as depositing checks, checking their balance, making their loan payments, and transferring funds though mobile and online banking. In the past year, 73% of Americans have used their primary financial institution’s mobile app for their everyday banking needs. These changes have a ripple effect, pushing institutions to make needed changes, the most notable of which being digital wallets and contactless payments.
Contactless payments take over
Merchants and financial institutions have shifted their payment options by investing in new technologies and offering these contactless options at their establishments, and digital wallets and payments have made this transition nearly seamless. Google Pay, Apple Pay, and Samsung Pay make it possible for consumers to access their digital wallet with just a tap, and pay just as easily. As of 2021, over 150 million Americans were using digital wallets and it’s estimated that by 2025, over half the world’s population will use digital wallets.
During the pandemic, these digital wallets became a safety necessity. Visa’s Back to Business study found that safety influenced how 78% of global consumers pay due to the pandemic with 48% of these consumers thinking that contactless payment methods like digital wallets are among the most important safety measures for stores to follow. While many discovered these wallets through safety means, they’ve stayed for the convenience and will continue to do so in the future.
Businesses are taking advantage of these digital wallets and investments in managing money though apps by continuing to find new ways to make checkout more efficient and self-servicing. Self-checkout has been around for decades, but why go to a checkout machine when you can do it all on your phone with digital wallets? For example, my local grocery store now offers a “shop and scan” option in their mobile app. Customers scan their items through the app as they place them in their cart and when they’re done, they pay on their way out via kiosks near the exit. No bagging, no waiting in line to checkout. Quick, seamless transactions.
What does the future have in store?
Looking to the future, it’s clear that innovation in the field of digital payments will continue. Financial institutions and businesses alike will offer more contactless options as consumers interest in these forms of payment will grow. By 2025, over half the world will be using digital wallets. By 2030, even more so.
What new payment options have you tried for the first time in the last few years? Are there services that you want, but aren’t sure if they exist? What challenges have you been facing in the realm of your banking needs? Stay curious and seek out new technology, it may just become your new favorite thing.