4 minute read
When the year began almost 12 months ago, no one could have predicted a force with such magnitude that it could completely turn global commerce upside down. That force, of course, being COVID-19. At various times over the year, countries around the world experienced strict government regulations around business openings and social distancing, dramatically impacting commerce. With COVID-19 as a powerful market driver, it accelerated many of the payment trends of 2020 that we predicted at the outset of the year, including the global explosion of digital wallet usage and the seamless integration of embedded payments into software across industries.
While we couldn't predict a force of nature this big when the year began, the picture is much clearer now. As always, hindsight is 2020.
Here's our 2020 payments trends recap.
The pandemic takes hold around the world
When consumers needed to prioritise their health and safety over everything else, their buying habits immediately shifted in response. Where in-person interactions previously were the predominant way to conduct business, it flipped virtually overnight to online.
Businesses began to quickly turn their full attention to digital and no-contact commerce across all vertical sectors to help their customers continue to interact with them in a safe way. As examples, retailers shifted resources to strategies like takeaway and collection; medical practices started conducting appointments online via telehealth; restaurants closed their dining rooms and went completely to online and mobile ordering, and schools switched to virtual learning.
With a unique view into the world of payments, we saw this ecommerce trend unfold globally. In the early part of the year, we equipped three times as many businesses as anticipated with ecommerce capabilities. Equipping these businesses with online payments technology was necessary to support the sheer magnitude of consumers that turned to ecommerce to make payments. Capgemini's World Payments Report 2020 found that the number of consumers who make 51-100% of monthly purchases online doubled during the pandemic.
The next normal in a pandemic
As restrictions began to lift over the summer and businesses started their safe commerce reopening plans, they rolled out techniques that let customers engage with them at a distance. For example, consumers could view a menu online and pay by QR code at restaurants, tap to pay with digital wallets in-store and make appointments for their pets.
Businesses also continued to expand their capabilities to conduct business virtually for those less comfortable venturing out. For example, event organisers, who primarily relied on hosting in-person fundraisers and activities, delved into organising and hosting virtual events for the very first time.
To be sure, these expanded ways to interact with businesses had a major impact on the acceleration of digital payment trends. According to The World Payments Report 2020, 64% of respondents surveyed said they used a contactless card during the global health crisis and 41% reported using it for the first time. Additionally, just over 46% had used mobile payments including digital wallets and QR codes to make purchases.
The ability to create these omnichannel experiences for customers was gaining momentum pre-pandemic, but COVID-19 hastened the pace substantially and helped businesses realise two significant benefits. First, it helped them make their customers feel safe while still being able to participate in daily and necessary activities. And second, it let businesses maintain relationships with customers for their continued sustainability.
What's next?
As the year winds down, the pandemic continues to be at the forefront. In fact, many countries in Europe just announced a second wave of tightened restrictions. Unfortunately, the pandemic may not be going away as we round the corner to 2021. But now, after 11 months of operating in this environment, we can look back and take away some critical lessons. Most important perhaps is the need to not assume that your customers are always within your reach. It's ever-more paramount to enable ways to connect with customers in any and all channels because now we know that the rug can, in fact, be pulled out from underneath you.
We've also learned that the pace of change can accelerate in an instant. Some of the aforementioned payment trends made more inroads in three months than the previous three years. This makes the ability to adapt and be agile qualities that businesses must embrace in order to keep thriving in a world where change is the only constant.
While we're all ready to put this year in the rearview, businesses of all sizes in all industries learned how to reinvent themselves in order to keep afloat and be better prepared for future disruption. There's a new wave of businesses as a result: those that know first-hand the importance of prioritising the customer experience above all.
This year will go down in the history books. What will next year bring? Find out when we release our 2021 Commerce and Payment Trends Report. Sign up and be the first to get your copy when it becomes available.
