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Time to Move Beyond Traditional Payment Integration

New Technologies are Changing the Future of Integrated Payments

When it comes to embracing changes related to payments, Americans skew on the conservative side of the fence – taking it slow and steady. For example, EMV chip cards were in mass use in Europe and other countries long before they became the norm in the United States. Thanks to COVID-19 though, slow and steady is quickly giving way to fast and furious.

Consider that contactless payments shot up 40% earlier this year, according to Mastercard. The demand continues to grow, and in some instances, faster than manufacturers can produce contactless terminals. We’re seeing a rapid acceleration in the demand and adoption of some other payment channels and methods as well. This means that software platforms that aren’t making plans to move to the next generation in payments may soon find themselves lagging behind.

Below are a few emerging payment trends that will affect the future of integrated payments.

1. Text to Pay

Text-to-pay allows your customers to engage their consumers by text message and give them the option to pay by simply replying to the message. Storing the consumers’ credit card information means they will not need to retype in the number to complete the transaction. It’s a quick and effective way for your customers to collect payments. In addition, it allows invoices to be sent to consumers along with the ability to engage if there are questions.

Tip: For those consumers that interact primarily over text, this is a preferred way to engage and pay.

2. ACH

While Automated Clearing House (ACH) transactions have been around for over 45 years, they’ve gained some notable momentum over the last year or so. A recent article on the Digital Transactions website refers to it as a bonafide surge in activity. This is particularly the case in the B2B world as checks continue their sharp decline. As such, you’ll see ACH integrated payment options continue to be incorporated more and more in the future.

Tip: While ACH tends to be less expensive to process, your customers need to understand the pros and cons.

  • They will not get instant “acceptance” as with credit cards
  • Rejections are more costly to resolve
  • They will not have the same recourse against disputes or fraud
  • Limits on high dollar amounts are stricter than credit cards

3. Buy Now/Pay Later (BNPL)

Installment payments are nothing new. After all, many of us are doing it right now with our vehicles. But now the trend is moving toward installment payments on smaller items, such as household goods. We’re seeing some noticeable growth in Europe, Australia, and even in the US as consumers are feeling the pinch from pandemic lay-offs, furloughs, and an uncertain economic future. E-commerce providers see it as a way to reduce the number of abandoned shopping carts on their site. It is a winning situation for everyone.

Tip: This trend is pretty much in its infancy here in the US. As such, there may be specific rules on the horizon around which payment methods will be allowed before enabling BNPL.

I’m sure as we continue to navigate through the uncertainty of this new world, more trends will begin to shape the future of integrated payments. And we’ll continue to keep you posted. In the meantime, the three noted above should keep your product managers and developers hopping for a while.

Steve Staden

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