Learn how consumer preferences for speed and convenience are driving payment trends, including a decline in cash use and an increase in mobile and contactless payments.
New payment trends and technologies like buy now, pay later (BNPL) and buy online, pick up in-store (BOPIS) have also mushroomed into the mainstream. Below, we review general customer payment preferences and payment trends in the retail, ecommerce, restaurant, and B2B industries.
Payment technology, including how people pay and the technologies businesses use, has transformed more over the last several years than in the entire previous decade. Trends and behaviors that started forming pre-pandemic accelerated, including preferences for contactless, mobile, and digital wallet payments over traditional tenders like cash.
As consumers and businesses tightened their belts in 2020, payment processing fees, which cost retailers and shoppers more than $130 billion in 2021, came under scrutiny. These fees, which currently range from 2%–4% per transaction, have always been a pain point for business owners as they cut into profit margins. However, shoppers started to notice as businesses explored other payment options that bypass these fees, like Venmo, or strategies that pass the costs onto consumers, like credit surcharging.
Our 2022 retail and ecommerce payments trends report reveals that the behavior and purchasing shifts that happened during COVID are here to stay. About 70% of shoppers have changed payment preferences forever due to the pandemic, with many now preferring online ordering and pick-up and contactless payments. This is evident in the click and collect growth rates shown below.
And by 2021, 67% of retailers offered some form of contactless payment. Though consumers quickly pivoted to contactless and online payments, shoppers aren’t using voice commerce to buy.
Brick and mortar wasn’t the only retail channel to experience a shift in payments trends. Over the last few years, ecommerce payments have changed rapidly as well. As you’ll see below, more shoppers are using digital wallets like Apple Pay for one-click checkout, and using BNPL services like Klarna.
Overall, these shifts are a welcome change for businesses, as faster and more flexible payment options at checkout can both lower cart abandonment rates.
While QR codes, online payments, and order-ahead technology are not new, adoption among customers and restaurants alike surged in 2020 out of necessity. However, the significant investments restaurants made in payment and ordering technology and shifts in customer preferences mean many of these changes are permanent.
Luckily, customer preferences and restaurant priorities are generally aligned, with both wanting faster, more convenient ordering and service options.
Despite being three times as large as the B2C payment market, B2B payment technology infrastructure and adoption rates drastically lag behind B2C payments. Cash, check, and ACH payments dominate the B2B payment landscape, with card payments representing only a small percentage of all B2B transactions.
After business slowed in 2020, B2B payments are picking up again, including cross-border and ACH payments. In fact, B2B ACH payments in the first quarter of 2022 increased by 15.5% from the first quarter of 2021, with more than 1.4 billion ACH B2B payments made. That is also a 35.5% increase from the first quarter of 2020, when B2B ACH payments slowed due to workplace closures from the pandemic.
Preferences for these payment types are not a passing fad; contactless payments and frictionless transactions are here to stay. To learn more, continue reading about how COVID-19 changed the shopping experience forever.
The Last Click: Retail and Ecommerce Payments Report
The retail environment is constantly evolving, and that evolution has taken on increased speed amid the COVID-19 pandemic and related societal changes. After reviewing data from top payment process sources, we identify payment trends that small businesses will want to follow in 2022—and beyond—to stay in the game.
45+ Online Shopping Statistics
While brick-and-mortar purchases still make up a majority of consumer spending, online shopping is steadily on the rise. More than 263 million American consumers shop online—some 80% of the population—and this number is projected to climb to 291.2 million by 2025.
Point-of-sale (POS) Trends and Technologies
Modern POS systems have added features and capabilities that turn each system into a virtual command center for your entire business. With increased mobility, data analysis, and security, POS technologies are becoming an integral part of every retail business.