New Payment Solutions Are Transforming the Way Small Businesses Are Conducting Transactions
The world of payment processing has been evolving fast over the last few years and while it used to be very difficult and expensive to get a merchant account not too long ago, merchants can now have a POS, merchant account, and terminal all wrapped up in one in a matter of a few days. The payments industry also saw a massive boom in 2021 with an all-time high number of processing companies going public, such as Paysafe, Nuvei, Marqueta, Affirm, and Remedy, just to name a few.
This year should also be a special year for the industry with more businesses returning to a brick-and-mortar or hybrid model. Let’s take a look at a few trends we can expect to see in the payments industry in 2022.
Surcharge Programs are Going Mainstream
Surcharge programs have been around for a while, but this could be the year they will explode. In short, surcharge programs allow merchants to pass credit processing fees down to their customers by charging them a fee when they make payments through their credit cards. Clients still have the opportunity to pay through debit in which case you’ll have to cover the fee.
This type of program is totally legal as long as you notify clients with proper signage that they will be charged extra when they will be paying through their credit card. Services like NadaPayments are simplifying the credit card processing process by offering a POS and terminal service along with a surcharge program. Their system will automatically detect when people are paying with a debit or credit card and that fees applied are never over the legal limit. They will even send signage and register your business with all the major credit card brands for you.
More Cashless Options
Contactless and cashless solutions are also on the rise and the global health crisis had a lot to do with it. Businesses wanted to limit the number of interactions their staff members had with clients and started unrolling more cashless solutions to both protect them and make things more convenient for everyone.
While it was common for businesses in the country to accept contactless payments through debit and credit cards, a lot of them were still reluctant to use digital wallets, but things seem to be changing. One study found that in-store mobile payments started growing in 2020 and that contactless payments are set to surpass credit card payments by 2025.
More people are open to using contactless mobile payments these days as well, and the US is catching up with the world in this aspect. In 2021, it was estimated that 1 out of 10 customers paid using a mobile wallet, which is comparable to what we’re seeing in countries with high mobile payment penetration like South Korea.
This means that businesses will need to make contactless payments a priority and allow customers to use an increasingly high number of different digital wallets and payment solutions.
Another interesting trend to watch out for in 2022 is the integration of payment solutions into non-financial applications. The increase in wallet-as-a-service solutions is one of the reasons why we believe embedded payments will become increasingly popular in this coming year.
Many industries will benefit from this, but one we can think of right away is the gaming and entertainment industry. Wallets-as-a-service platforms allow these companies to integrate payments seamlessly into their apps without requiring customers to constantly input their payment information. Not only does it simplify the process for everyone involved, but fewer steps usually convert to lower abandonment and instill trust in the heart of customers.
Crypto Payment Gateways
Many experts are predicting that 2022 will be a huge year for cryptocurrencies and cryptocurrency payments. The technology accepting crypto payments has been there for a while, but services like Square (now Block) are making more aggressive moves to convince merchants to start accepting cryptocurrencies.
The rise in popularity of stable coins is another reason why we should start seeing more businesses online and offline accept crypto payments. High volatility has always been a huge barrier to the mass adoption of crypto payments, but stable coins are a viable solution to that.
Stablecoins act like cryptocurrencies and are exchanged on a blockchain, but they are pegged to more stable assets with the US dollar being the most popular. This allows merchants to quickly convert any crypto payment to a more stable asset fast while still benefiting from the fluidity of a cryptocurrency and exposure to the crypto market.
The world of global payments is evolving fast, and this year should be very interesting for the industry. Whether you’re a business owner, stockholder, or manager, we suggest you stay tuned for the most recent changes and see how they could affect you.
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