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As per McKinsey & Company's report, cash transactions around the world have declined from 89 percent to 77 percent. According to the Federal Reserve, cash has lost its prime spot as the most commonly used payment method in the United States.
FREMONT, CA: There has been a significant shift in the world of payments over the last ten years, and there is no question that substantial changes will continue to take place in the coming decades as well. Payment patterns for 2020 tend to push the market in a much more consumer-centric direction, focusing on making purchases as fast and comfortable as possible.
Below Four patterns highlight this commitment to unrestrained payment processes:
Declining Number of Transactions in Cash
According to McKinsey & Company, cash transactions around the world have declined from 89 percent to 77 percent. According to the Federal Reserve, cash has lost its prime spot as the most commonly used payment method in the United States. Debit cards currently account for 28 percent of payments vs. 26 percent of payments made in cash. Moreover, analysts predict that cash use will continue to decrease over the next five years due to factors such as new payment options and increased growth in digital transactions.
This year, banks are offering new, contactless payment cards. These cards, featuring near-field communication (NFC) technology, would allow customers to easily tap or wave their cards near a card reader to make transactions up to a specified amount. From the fast service restaurant and convenience store consumers to the NYC Metropolitan Transit Authority, consumers will start to experience how convenient and easy it is to tap and go.
As traders upgrade their payment hardware to meet this demand, the contactless payment trend is expected to extend beyond contactless cards. The same technology that enables retailers to accept payment using a contactless credit card will also allow them to accept mobile wallets such as Apple Pay, Google Pay, and Samsung Pay or pay via watches, wearables, or fobs.
Consumers have been using fingerprints to open their devices, authorize mobile banking transactions, and make mobile payments for a while. Look for fingerprints or other biometric authentication to authorize payments in even more locations, making transactions more effective, secure, and reliable.
The Internet of Things (IoT) technology has the ability to deliver transparent payment processes. Often as drivers with RFID sensors can bypass toll booths and pay their tolls with a card on file, customers, such as Amazon Go shops, may be able to pick up their orders, exit the store and collect a refund on the app or by email or text.
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