Consumers are ready for more digital payments — as long as security concerns are addressed.
The coronavirus pandemic promises to change the way that consumers pay for retail goods — and it might not be enough for merchants to simply offer a smartphone app and be done with it.
A new report from New York-based Deloitte finds that the rise of e-commerce and digital and mobile payments during the pandemic could lead to demands from consumers for more sophisticated retail offerings.
When the economy finally does reopen, the report said, many consumers are likely to continue to shop online or on smartphones for home delivery. That behavior likely will lead to even more retail payments innovation.
For instance, the report said, a platform or an app that can bundle several home delivery services — such as picking up groceries, buying medicines and delivering household supplies — into a single payment has the potential to elevate consumers’ digital shopping experience. Payments institutions can consider creating a close-ended network on such platforms that join consumers and different merchants, aggregating consumer transactions and settling payments between parties for a fee, similar to their possible role in future mobility ecosystems.
Don’t count out cash, however.
Deloitte said that while consumers increasingly prefer no-touch payments, many are also hoarding cash as a store of value for unforeseen times. Whether consumers’ preference for using cash returns when the U.S. economy comes out of the lockdown will be a dynamic to watch out for in the coming months.
Security, though, shouldn't be taken for granted.
Even with the further rise of digital and mobile payments for retail purchases — and ongoing work toward apps that can both reduce friction and bundle different services and retailers under one umbrella — consumers keen on using these payments methods more often still worry about being ripped off. A TransUnion study reveals that, within a week since the onset of the pandemic, 22% of U.S. consumers surveyed have been targeted by digital fraud. Deloitte said that as threat actors increasingly look to exploit individuals’ vulnerabilities, bolstering security could be a linchpin to maintaining trust among consumers and keep the pace of retail payments innovation going.
The coming months will bring more clarity to the post-pandemic face of retail — and you can bet that payments will play a big role.