The Evolution of Payments: Shaping the future for retail brands
In 640 BCE, China began minting coins in the first known use of standardised, metal money. Over the next few thousand years, coins and paper notes remained the go-to choice for exchanging goods, with very little change in how money moved from person to person. Then came technology.
The arrival of the digital age has triggered a new evolution, shaping the future of payments to take on an entirely new shape.
For retail brands around the world, that means adjusting how you process transactions to keep up with consumer demand, and that all starts with understanding PayTech.
Technology is Driving the Future of Payments
There’s no denying that technology is the driving force behind the evolving face of retail payments.
Payment technology (or PayTech) has enabled digital transactions as an alternative to physical cash, and consumers have taken the new methods firmly under their wings. Now, only 14% of transactions in the UK are made with cash, toppling the payment system that lasted for over 2,000 years.
For retail businesses, this means that every establishment is moving towards digital. Even traditional, brick-and-mortar shops are embracing PayTech, with card machines that accept contactless payments becoming a must to reach digital-savvy consumers.
What is Paytech?
Paytech refers to payment methods that involve technology to enable the transaction. The main method of PayTech for retailers is the card reader.
This was first introduced to UK commerce in the latter half of the 20th century, but cash was still very much a prominent part of payments at this time.
It wasn’t until the card reader evolved to become contactless that PayTech began to dominate the retail scene. By enabling consumers to simply tap their debit or credit card against the card reader, digital payments were made far quicker than their cash counterparts, and PayTech tightened its grip on British consumers.
Between 2017 and 2018, card transactions overtook cash in the UK for the first time. It was reported that – just 10 years after the technology’s beginnings in British society – two-thirds of consumers were embracing contactless payments.
Contactless payments have also made way for digital wallets. By adding card details to smartphone wallets, like Apple Pay and Google Pay, customers don’t even need their physical card to go cashless. A quick tap with their phone over your card reader is enough to complete a transaction. It’s simple, smooth, and secure.
Payment tech can relate to other forms of digital payment, too, like QR codes and online payment links. Though these aren’t as common as contactless payments in the retail world, they can still enhance the customer experience when used in the right place.
Are Cryptocurrencies a Form of PayTech?
Crypto and blockchain are typically classed as FinTech (financial technology). However as cryptocurrencies begin to make their way into the world of retail transactions, they’ll also fall under the category of PayTech.
Though a lot of people hear the words blockchain or crypto and dismiss them as niche trends, it’s actually a good idea to take these new branches of payment technology seriously.
In the US, around a third of consumers are interested in using cryptocurrency to make payments, and with the adoption of crypto on the rise that isn’t likely to slow anytime soon. Though uptake is a little slower in the US, 15% of British consumers intend to buy cryptocurrency in 2024, with that figure rising among younger, tech-savvy audiences.
Companies including Starbucks, Tesla, Burger King, Etsy, and Microsoft are already accepting crypto payments, too. When looking at how PayTech is evolving the future of retail payments, crypto and blockchain shouldn’t be ignored.
The Benefits of Payment Technology
It’s standard practice for eCommerce businesses to embrace digital tech, enabling customers to make online purchases with ease. But, as a brick-and-mortar retail shop, why bother investing in payment technology?
To understand how it could shape the future of your business, here are some of the most important benefits.
Reach a Wider Audience
Around 23 million consumers in the UK don’t use cash or use it a maximum of once a month. An increasing number of Brits don’t even carry cash with them when shopping, cutting them off entirely from any shops that don’t take card payments.
By embracing PayTech, you ensure that all customers who want to shop with you can, regardless of how they choose to pay. This opens up your business to a wider audience and prevents lost profits, helping you cater to the contemporary consumer.
This is true of the older market, too. Many retailers with an older audience are slower on the uptake of payment technology, but 80% of 85-95-year-olds in the UK now pay with contactless, showing a demand across generations.
Create a Competitive Advantage
One of the biggest struggles for retail businesses is competition. With payment technology, though, you can give yourself an advantage over local competitors who aren’t yet catering to cashless customers.
If you know that there are local shops that don’t accept card payments, advertise that you do. This could end up being the differentiating factor that leads to more conversions.
Cut Down on Queues
PayTech is often quicker than cash payments. A contactless card reader, for example, can accept large payments in a single tap. Compared to cash payments, in which the individual coins and notes must be counted before change is given, it’s a super speedy method.
This leads to a better customer experience, reducing queues and creating smooth transaction processes. It also frees up your shop staff to get on with other jobs, such as helping potential customers, and leads to a more efficient business.
Streamline Business Money Management
For a lot of retail shops, PayTech is game-changing when it comes to money management. By reducing your reliance on cash payments, you can:
- Cut down on trips to the bank
- Reduce financial theft
- Monitor your cashflow in real-time online
It’s time-saving and more efficient, giving you better control of your business finances.
Enable Cross-Border Payments
For eCommerce brands, payment technology is also improving cross-border payments, enabling you to better serve a global audience. Payments from different countries can be made faster, cheaper, and more secure with the implementation of digital tools.
This makes it simpler to open up your brand to multiple nations without a steep learning curve.
Final Thoughts
Payment technology has revolutionised the way that businesses around the world take payments. Hopefully, this article has given you the insights you need to understand how PayTech could improve your business and how you can get started.
For more retail industry insights, be sure to stay up to date with The Retail Bulletin.
