Purchasing patterns are changing with today’s economy, and both retailers and consumers continue to adapt and adjust.

The abundance of promotions, additional payment methods and new financing options can be overwhelming — but it doesn’t have to be.

It’s no secret that the world continues to make progress in this new digital age. How and where we shop, who we buy from, how we manage our budgets and finances and plan for the future is evolving.  Consumer payment options are no exception, and if the trends hold, digital payment solutions will become more influential. Whether it’s alternative credit options, mobile-first strategies or more secure and efficient ways of paying, expect to see these technologies offer improved experiences for both consumers and businesses.

We’ve broken down five payment trends to keep an eye on:

The Mobile Shopping Experience Becomes Faster and Easier

Online shopping has become a preferred way to buy, and retailers should adapt their — strategies with digital and mobile shoppers in mind. Synchrony’s 2021 Major Purchase Study revealed that the number of shoppers using a mobile device in their purchase journey increased by 28 percent between 2019 and 2021. For retailers, this is a prime opportunity to build and fortify customer loyalty.

Whether that means making the checkout process faster, integrating digital wallets (Amazon Pay, Apple Pay, Google Pay) or offering financing options that shoppers can apply and use directly from their phones, improvements to the mobile shopping experience are likely to continue.

The Future of Payments Is Invisible

The use of contactless payments, particularly QR codes, has exploded in recent years — and it’s only getting started. QR payments are estimated to account for 27 percent of all digital commerce transactions by 2024, making it the most used digital commerce method in terms of volume, according to Juniper Research.

Beyond contactless, a new payment method is expected to gain popularity: invisible payments. These payments occur in the background almost automatically, requiring little more than opting in on a smartphone app beforehand or even saying “yes” to confirm the transaction. “Checkout free” stores, such as Amazon Go, uses a combination of QR codes, cameras and weight sensors that enable shoppers to walk in, grab an item, and “just walk out” — all without using traditional checkout experiences such as scanning their item at a full- or self-serve kiosk or stand.

Real-Time Payments is Transforming Business Transactions Forever

Real-time payment (RTP) technology allows for instant settlement of digital transactions between individuals and/or businesses without needing to wait for clearance. In recent years, it’s been generating buzz in the U.S., primarily for its efficiency, and may become the next big trend in payment technology in 2022. Recent reports confirm that 130 financial institutions are working on implementing real-time payments into their existing infrastructures and the Federal Reserve plans to roll out its own RTP platform in 2023.

For individuals, real-time payments can mean not having to wait to move funds from a mobile payment app to a bank account. For retailers and businesses, it can mean faster payroll processing or the ability to liquify funds in an instant.

‘Buy Now, Pay Later’ Is Booming...and Here to Stay

More retailers and financial institutions are offering Buy Now, Pay Later (BNPL) programs — which some people think of as an interest-free alternative to traditional credit cards. While it still isn’t the most widely used payment option, it is gaining momentum – especially with Millennial and Gen Z shoppers.

According to Synchrony’s 2021 Major Purchase Study, while only one percent of shoppers used BNPL for their most recent major purchase in 2021. Fifty-eight percent of shoppers aged 18-35 who did pay using BNPL have done so multiple times. (Synchrony POS Installment Lenders Study)

“One of the biggest trends in financial services right now is Buy Now, Pay Later. Overall, consumers want the flexibility of payment options, with the certainty of equal payments that fit within their budget,” says Steve Hopwood, SVP, Financial Products, Synchrony. “These new technology trends are becoming useful in a variety of ways for businesses and consumers alike. These installment loans are providing people the ability to pay for smaller ticket goods right away, breaking the payments up into four or more equal payments.  It always goes back to providing payment flexibility.”

It’s expected that shoppers will increasingly embrace this payment method as it becomes more prevalent. An Insider Intelligence report projects that the industry will grow to $680 billion in transaction volume by 2025. Buy Now Pay Later: Ecommerce Financing & Consumer Credit (insiderintelligence.com)

Biometric Verification Continues to Grow in Influence

As mobile, invisible and real-time payments all increase in popularity, protecting against theft and fraud will be top of mind for institutions and individuals.  To protect against cyber-attacks and identity theft, more organizations are turning to mobile biometric technologies. Biometric authentication will secure $2 trillion in mobile and in-store transactions by 2023, according to Juniper Research. Smartphones using biometric hardware like facial recognition and iris scanning is expected to exceed 1 billion devices over the next five years, according to Juniper Research.

Biometric technologies are finding new ways to verify payments. Amazon has begun implementing palm-scanning verification technology in its brick-and-mortar shopping experiences.

These trends represent major shifts in the payments space and we’re only scratching the surface of what’s to come.