The COVID-19 pandemic has taught society so many lessons when it comes to e-commerce and the broader economy. Few, though, have been bigger than the ones the payments industry has learned. Cash transactions, and even traditional credit cards, are no longer enough for the billions of people who have embraced e-commerce.

That online growth is triggering innovation in the payment space. Global Payments, a software provider for digital commerce, has identified five trends that are altering how global consumers and brands conduct commerce:

  1. Contactless payment adoption
  2. Expanding omnichannel options
  3. Embedded fintech
  4. Technology advancements
  5. Financial inclusion

“As the most transformative force in generations, the coronavirus pandemic of 2020 drove seismic shifts in how people shop and pay,” the report, “Five Payment Trends Transforming Commerce,” noted. “These new consumer preferences are here to stay, and will continue to shape the next normal for merchants and issuers in 2021.”

Read: Cryptocurrencies gaining traction as e-commerce payment option

Contactless payment — using RFID or NFC technologies to pay by tapping a card, wearable or smartphone — has grown in popularity. According to a Visa Back to Business survey, 63% of consumers would prefer to patronize a business using contactless payments if other factors (price, selection and location) were equal. A full 46% believe “using contactless payment methods is among the most important safety measures for stores to follow.”

A similar survey by American Express found that 70% of businesses reported customers requesting contactless payments. Global Payments said that 82% of millennials are more likely to use a new shopping or payment method since the pandemic started and 74% said they will continue to do so post-pandemic.

“Businesses that create awareness around their contactless payment acceptance will win more customers this year and be better positioned for growth,” Global Payments noted.

Omnichannel shopping also grew exponentially during the pandemic. According to a Google survey, 18% of consumers started shopping online for the first time in 2020.

Since March/April 2020, online purchases are up 52.9% while in-store sales dropped 0.6%. Prior to COVID, online purchases were trending about 20% above prior year, slightly better than 2016-2019, when e-commerce purchases ranged from 13.37% to 15.58% growth, according to U.S. Census Bureau data.

Looking deeper into the numbers, tracking firm Commerce Signals found that total consumer retail spending increased 21% in October, 17.9% in November and 16% in December. Online, though, grew 55.9%, 53.2% and 47%, respectively.

Among the options retailers are adopting is the ability to pay using QR codes. Juniper Research found that 11% of U.S. consumers started using QR codes in 2020, and that 27% of all digital commerce transactions in the next five years will involve a QR code.


“As the most transformative force in generations, the coronavirus pandemic of 2020 drove seismic shifts in how people shop and pay. “These new consumer preferences are here to stay and will continue to shape the next normal for merchants and issuers in 2021.”

Global Payments


The third trend Global Payments sees is embedded fintech. Think rideshare apps as an example. The customer takes out the app, books the ride and payment is made.

“At no point does the consumer have to take out a payment card — the transaction is already a part of the value proposition,” Global Payments noted. “Behind the scenes, payments and software work together to deliver this seamless experience.”

Amazon’s payment process is another example. The goal for businesses, the report noted, is to make the process as seamless as possible for the customer. It said that venture firm Andreessen Horowitz believes a business can increase a customer’s profitability up to five times the original revenue stream with embedded fintech.

The fourth trend is the advancement of technology, specifically cloud technology, that is enabling digital commerce.

“Businesses will reap the benefits of cloud technology by combining the value of existing platforms with the technology that public cloud services providers enable,” the Global Payments report said. “Getting this combination right takes work, but the payoffs include greater reliability, faster product delivery cycles, better economics for scalability and innovative customer analytics that leverage internal and external data sources.”

Read: AI breaking down silos and improving e-commerce experiences

Open banking — the ability to connect financial firms to payment providers and sellers via application programming interfaces — and 5G technology deployment that speeds transactions are also trends that will accelerate payments in 2021, Global Payments said. In the case of 5G, the technology allows retailers to geofence their properties so they can be notified when a customer arrives to pick up items.

Finally, Global Payments sees an acceleration of the digital economy which allows billions of people that are currently “unbanked” to access financial payment services through other means, such as digital wallets.

This trend has become evident in recent announcements by payment firms. In its year-end earnings report, Square (NYSE: SQ) said it had purchased approximately 3,318 bitcoins at a cost of $170 million. The company previously had purchased $50 million in bitcoin. The total of approximately $220 million represents roughly 5% of Square’s total cash, cash equivalents and marketable securities on hand as of Dec. 31, the company said.

The reason for the purchase is that Square “believes that cryptocurrency is an instrument of economic empowerment, providing a way for individuals to participate in a global monetary system and secure their own financial future. The investment is part of Square’s ongoing commitment to bitcoin, and the company plans to assess its aggregate investment in bitcoin relative to its other investments on an ongoing basis,” the company said.

On Feb. 17, OLB Group (NASDAQ: OLB), a provider of omnicommerce and payment solutions for small and midsize merchants, announced its SecurePay platform could conduct transactions in cryptocurrency. Cryptocurrency wallets can be used directly at any point of sale (PoS) utilizing OLB’s OmniSoft cloud-based business services platform solutions, it said. Also, general-purpose wallet services — including Apple Pay and Google Pay — can be used to make purchases at any PoS serviced by OLB’s SecurePay gateway.

Josh Brooks, head of marketing at OnBuy.co, said that cryptocurrencies represent an opportunity for retailers to reach new customers.

“With the ability to appease consumer demand for immediacy and security, while expanding market share for retailers, cryptocurrencies could prove extremely beneficial for the eCommerce industry if adopted efficiently,” Brooks wrote in a recent commentary for Global Banking and Finance Review. “More and more companies have grown to understand these benefits, leading to a surge in consumer attention, and it may not be long before we start to see the commercial use of cryptocurrency as standard.”

Technology is driving payment innovation, but the COVID pandemic accelerated it, and businesses and consumers appear to be on board with this change. Global Payments noted that “all parties involved in payments have a moral obligation to empower commerce for everyone.”

The businesses at the forefront of this revolution are learning the value of payments innovation. The pandemic proved that.

Click for more Modern Shipper articles by Brian Straight.

You may also like:

Social Auto Transport raises $1.5M in seed funding to expand gig economy auto-moving business

Bringg’s collaboration with Uber opens new doors for e-commerce

Walmart to begin drone delivery pilot this summer