This is the first of three posts we’re doing on the future of payments. Stay tuned for our next two entries on what payments in 2030 will look like and how younger generations are changing the face of ecommerce.
As younger generations start to hold more buying power, their influence is increasing – greatly.
Millennials and Generation Z grew up with technology, expect easy, quick and safe transactions, and companies that fail to do so are inherently disadvantaged.
Gen Z, in particular, is driving money management innovation. Now in the workforce, their desire for more flexible options is likely to force more traditional institutions to transition to mobile payment options.
In fact, they could be the first generation to use digital payments almost exclusively.
What do these changes mean for the subscription industry? Read on to find out.
How is technology affecting how we pay for things?
In the past, there was the debate between cash versus a credit card. The new debate isn’t even physical vs. digital, as much as it’s about what kind of digital payment will be king. The amount of people using mobile wallets is growing rapidly, and those numbers are only expected to go up.
Some banks are preparing for the future by partnering with peer-to-peer (P2P) apps, making it easy for their members to send tap-and-go payments. Subscription businesses should be aware of this and be prepared for the lines between P2P, C2B, and B2B payments to be blurred.
Subscription providers need to have a mobile payment option available on their site. Approximately half of all web traffic is mobile, and increasing. If there’s not an app or mobile-optimized website, you’re not responding to your customer needs.
A good mobile payment process includes:
- Tokens for credit cards (more on tokenization and security here)
- The ability to accept mobile wallets and have shopping carts that automatically detect them
- Smart authentication
These features will become standard one day. Businesses who hop on the bandwagon now are already prepared.
What do consumers want?
Ease and security are top-of-mind for consumers.
The public has come to expect mobile payment abilities, an intuitive user experience (UX), and fraud protection. Many customers won’t use a service that doesn’t live up to those standards.
Thanks to open banking and APIs, it’s possible for payment services to offer simple, pleasing transactions to consumers – complete with perks like instant rewards and balance alerts.
As these mobile payment technologies are created and improved, UX will be a top priority for subscription providers.
An easy to understand layout and payment process will set you apart. A simplistic experience makes it easier for consumers to make the technology part of their daily lives.
What does the future look like?
Forget transactions that take days.
For consumers, real-time transactions are the speed of now and the future. Subscribers want what they’re paying for and they want it immediately.
For B2B payments, expect to see more transparency, information-rich transactions, and speedier access to funds. As you’re starting to see today, more payment partnerships and digital invoicing options are allowing small business to get in on the move to digital payments.
Whether you’re an individual or large business, it’s only going to become easier to accept payments. Digital payment tools allow everyone from solopreneurs to startups to Fortune 500 companies to accept mobile payments, send digital invoices, use a pricing formula that suits their business, and more.
This lowers the barrier to entry for anyone looking to start a subscription service. Have an idea? You can start taking payments for it by the end of the week.
How does this affect subscription services?
- Better service for international customers
- Increased security
- Easier set up
If your product supports the largest digital wallet options (like Apple or Samsung), you’re providing easy options for a large portion of the world’s population. No longer will there be fraud alerts because a card is used for a foreign transaction.
All that with one action. New payment options bring added layers of security to smaller businesses that were unavailable previously.
It’s also easier for the business and the consumer to conduct a transaction. The subscription industry is demonstrably a growth industry and business owners will have more control than ever before over every step of their payment process, from customer signup to automatic retries and more.
If you’re starting a subscription business, you know the challenges that entails. Want more tips on how to get your business up and running? Download our free six-month checklist, complete with a resources guide, and see how you’re doing:
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