Your Customers Have Adopted Digital Payments. Have You?

February 13, 2020

By: Andy Barker,

Head of Payments and Partner Products

, Adobe


Digital payments are becoming more popular as shoppers increasingly rely on their smartphones to help manage their money. Retailers are responding by giving customers a more seamless experience at checkout – both online and in brick-and-mortar stores.

With platforms like Facebook, Instagram, Pinterest, and Snapchat adding more eCommerce features, and with many digital wallets integrated with loyalty programs, moving money from point A to point B has never been so easy. That trend will continue to accelerate, especially as voice payments, biometric authentication, and cryptocurrencies gain consumer acceptance.

These developments are among some of the trends that will profoundly affect digital payments in the next 12 to 18 months. It's important for eCommerce companies to narrow their focus to payment methods that are most meaningful to their key customers.

Below we dive into some of the biggest payment trends. Which ones will you implement?

All-In-One Super Apps

Digital payments are becoming more integrated with online media platforms, such as search engines and social networks, that are building out eCommerce support as they seek to become all-inclusive super apps. The goal is to keep shoppers within a single app that handles a broader range of tasks that include integrated payments.

To get a better idea of how the market is evolving, let's look at WeChat, the messaging app from Chinese Internet company Tencent. WeChat has branched out from its messaging roots with its support of "mini programs" for online shopping, bill payment, travel booking, ticketing, and ride-hailing, among other services to connect businesses with customers.

WeChat's role as an all-encompassing "lifestyle hub" provides a window into a possible future for other tech companies that push into eCommerce. For example, Facebook, which also owns Instagram, Messenger, and WhatsApp, is in various stages of adding payment support to its apps; YouTube is touting more shopping experiences that are integrated with payments; and Snapchat and Pinterest also have more eCommerce support.

Shift To Digital Wallets

The popularity of WeChat and rival Alipay from eCommerce giant Alibaba has led some parts of urban China to become entirely cashless – leapfrogging into the modern era after years of underdevelopment. In addition to handling digital transactions, the apps let consumers make payments at brick-and-mortar stores without the need for cash or a plastic card.

U.S. consumers have been slower to adopt mobile payments, mainly because plastic payment cards are trusted and easy to use. In addition, for years U.S. companies have invested heavily in the infrastructure to support card payments. The enduring popularity of plastic cards has even led Silicon Valley companies like PayPal and Apple to offer cards to help boost adoption of their payment services.

However, younger Millennials and Generation Zers now entering adulthood are helping drive adoption of digital payments, both online and at the point of sale in brick-and-mortar stores. Younger generations have grown up using smartphones for gaming, streaming media, and social interactions. That familiarity with the technology is leading to higher adoption of digital wallets as young people learn to manage their own money.

Personalized Experiences for Digital Payments

The expanded role of social media in eCommerce and the evolution of digital wallets are part of a broader trend in offering consumers more personalized experiences online and in stores. The retail environment is becoming more seamless as shoppers not only place orders for home delivery, but also visit stores to pick up orders or to see products ranging from apparel to electronics.

Letting customers shop whenever they want and wherever they want also involves giving them a chance to pay however they want. Retailers have more ways to accept payments than ever before, giving them the possibility to ease the friction at checkout.

However, it's important to focus on payment methods that are most meaningful to customers. Payment methods available to merchants now include PayPal, Apple Pay, Amazon Pay, Samsung Pay, Google Pay, Masterpass, and Visa Checkout, among others. Instead of overwhelming consumers with dozens of different options, it's more effective to provide the ones that are most relevant.

Digital payments are also becoming more integrated with loyalty programs, letting businesses develop rewards that are more meaningful to their customers. A growing number of businesses are creating mobile apps that let customers track points and see their progress toward earning a reward.

Voice Payments

Voice-powered assistants like Apple's Siri and Amazon Alexa are now available on billions of devices, the most common one being a smartphone. As consumers become more familiar with voice-powered technology, they are more likely to use verbal commands to handle tasks like making digital payments.

Voice commerce is still somewhat of a novelty, but it shouldn’t be underestimated as more companies develop apps that handle voice commands for shopping and making payments. Consumer adoption of the technology will grow as more people equip their homes with smart-home appliances and become more comfortable with those verbal interactions.

Amazon, which created the Alexa voice-powered assistant to power its smart-home appliances, found in a survey that 40% of consumers expect to use voice commands as part of their shopping experience in the next three years. That path to purchase not only included researching products, but also the final purchase transaction.

Bank of America has invested heavily to develop its Erica virtual assistant to handle a broader range of services. Bank customers can interact with Erica via text or voice commands and perform tasks like viewing bills and scheduling payments. It's important for eCommerce companies to be prepared for the era of voice commerce that’s becoming a reality.

Biometrics Payments

Biometric technology, such as fingerprint scanning and facial recognition, is becoming more integrated with digital payments as an authentication method. They can save time in approving secure payments instead of forcing customers to re-enter credit card information or to remember another password.

However, biometrics also have led to significant privacy concerns because the information is so personalized and unchangeable. While a consumer can cancel a payment card and order a new one because of suspicious unapproved charges, biometric information about fingerprints don’t change much throughout a person's life. It's important to protect that information because a data breach could be very costly.

Looking Ahead

The year ahead will see significant advancements in digital payments amid growing consumer adoption of newer payments methods. Payments are a key part of the customer experience, ideally one that is so smooth that customers don't pay attention to it. While shoppers have more ways to make digital payments than ever before, eCommerce companies should focus on payment methods that are most meaningful to their key customers.