A Short History of Payments
Payments and money have changed dramatically over time. It all started with bartering and trading, and then a tally system was developed to keep track of what people paid and what they owed.
However, as communities grew, the financial system changed as rulers began to impose taxes and it was harder to keep track of expenses. IOUs were implemented, with objects such as whale teeth left as collateral until a debt was paid. This became an early form of currency, as this IOU object could be used and reused once a debt was paid.
Then, metal money came along so that rulers could implement a payment system that had intrinsic value. After metal money came paper money – a new form of IOU that noted the value of metal coins. This paper could therefore be exchanged for metal or gold coins, later evolving into the check.
In the mid-19th century, the credit card was invented, though it took over a century for it to become widespread. Nowadays, credit cards have become one of the most popular and fastest growing cashless payment methods, though they’re not the only one. Let’s explore more below.
The Shift to Cashless Payments
Over the past few decades, cashless payments have become more common. This trend was only accelerated in 2020, when the COVID-19 pandemic hit. Fear of contact and human interaction led people to turn to cashless and contactless payments to avoid infection.
Along the way, consumers and operators realized that cashless was also more convenient. They didn’t need to go to an ATM and they didn’t need to count their cash to make sure they had exact change. Consumers even began to shift towards mobile wallets, eliminating the need to carry their credit card around.
In a recent survey conducted by Vending Market Watch, 74% of vending and micro market operators agreed that accepting cashless payment methods was a good investment for them. This shows that cashless is what the consumer wants, and highlights the trend towards a cashless society.
Payment trends are changing fast, and it is important for operators to future-proof their business to stay ahead of the curve. Accepting multiple cashless payment methods provides better customer service and therefore increase your revenue.
Different Ways to Make Cashless Payments
Before we dive deeper into cashless trends, let’s review what types of cashless payments exist.
A check is a piece of paper that contains your bank account information and that you have to fill out in order to pay with. Checks are not often used now in day-to-day transactions because they’re not very convenient and are more often used to make large payments such as rent.
When you pay with a credit or debit card, you can make a contact payment by either swiping your card on the card reader or inserting your card into the card reader if it has an EMV chip. EMV chip cards are more secure because they encrypt every transaction from end-to-end. While swipe cards are still being produced, EMV cards are taking over the market, making up over 90% of Nayax transactions.
You can also make contactless payments with your credit or debit card. The card communicates with the card reader and the transaction information is sent to the banks and either approved or declined, just like in a contact transaction. If you have an EMV credit card, for example, you can simply tap your card on the card reader for a quicker transaction.
QR Codes are another form of contactless payment that require a mobile phone. When you scan a QR code, you can be redirected to a website to complete an online payment or you can pay through a mobile app such as Monyx Wallet.
And lastly, we have mobile wallets, probably the most advanced form of contactless payment. With near-field-communication (NFC) technology, you can pay with your credit card without taking it out of your wallet. You just tap your phone on the card reader and voila! You’ve made a payment. This is probably the most convenient form of payment, because it means you don’t have to carry your wallet around with you.
Consumer Behavior and Expectations
As we discussed earlier, consumer behavior is quickly evolving. This evolution was further bolstered by the spread of the coronavirus pandemic, which caused consumers to become more proactive in their shopping. Because there is so much competition among businesses, consumers are using their power and ability to choose, further impacting market trends.
And what are consumers choosing? Personalized, convenient, and frictionless shopping experiences. As a business owner or operator, it is important to pay attention to these trends so that you continue to hold your place in the market. One of the most effective ways to provide an experience that consumers want is accepting multiple forms of cashless payments. With these new technologies, not only can you provide your consumers with the CHOICE to pick which payment method they want to pay with, but you can also provide them with easier and more seamless transactions. No more waiting in line as the person in front of you counts their change, you just simply pull out your phone or credit card, tap it, and go.
Cashless Payments and Consumer Loyalty – The Rise of Mobile Wallets
All trends point to mobile wallets being the future of payments. Their convenience and security make them an attractive option for many consumers. And they’re much more than payments: with mobile wallets, operators can also bolster consumer loyalty.
This valuable tool can enable operators to create marketing campaigns and to provide their consumers with personalized discounts, punch card campaigns, and more. Mobile wallets like Nayax’s Monyx Wallet, for example, boosts customer engagement with gamification and personalized deals. Digital engagement solutions are a powerful bonus that mobile wallets provide, and open doors for the future of payments to be more engaging, interactive, and convenient.
So what are you waiting for? Get started with Nayax today and future-proof your business.