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The Onbe Blog

Original Insights Into Fintech Culture

How digital payments will help us build the new normal 

David Josephs is President & Chief Operating Officer at Onbe, where he’s laser-focused on the consumer experience and enabling companies to build the payment experiences of the future.

The long-awaited “new normal” is under construction. As consumer confidence grows along with the percentage of the population that has been vaccinated, many are making a cautious return to in-person activities. At the same time, comfort levels vary, and not everyone’s ready to resume indoor dining or shop in store just yet. Add to that the fact that many consumers have learned new behaviors and discovered convenient options that likely aren’t going anywhere—such as online grocery ordering and a shift away from cash to digital payments. 

All this means that to enable a return to commerce, businesses must accommodate a wider range of payment choices than ever before. Consumers are increasingly conscious of how they shop and pay, and their preferences for engaging with brands on site, remotely, or with distancing measures in place may change depending on the day, mood, or situation. So, the form factors in play must be flexible enough to serve consumers wherever they are—and however they’re feeling. 

Even before the pandemic, we saw payment preferences rapidly diversifying, with consumers increasingly using virtual cards, digital wallets, payment apps, and even cryptocurrency along with cash and checks. Yet, the need to socially distance ended up popularizing slower-growing form factors such as contactless payments. In our 2021 study of consumer payment preferences in the UK, contactless payments dominated, with more than half of consumers reporting that 75% or more of their in-person payments are now contactless. And while the US has been slower to embrace this technology, the pandemic nonetheless accelerated adoption. In a Visa study, 70% of cardholders new to contactless payments said they’d continue using this method after the pandemic. Even more significantly, 54% of respondents said they would switch stores to one that supports contactless.

How consumers choose to pay is only half the picture. Meeting diverse consumer preferences calls for flexible solutions when issuing payments such as incentives and refunds, too. The popularity of receiving rewards virtually gained ground over the last year, and our UK study found that 40% of consumers prefer an instantly delivered, virtual prepaid card over direct deposit. In fact, we found that virtual cards are now among the top ten most popular payment methods, though many consumers were unfamiliar with this option just several years ago. Beyond minimizing in-person contact, digital payments offer speed, convenience, and the flexibility to spend funds via any channel. Customers who evolved to prefer digital payments during the pandemic will keep realizing these myriad benefits even when social distancing becomes less of a priority.

And for businesses looking ahead to a post-pandemic reality, digital payments are a more cost-effective way to make payouts in a variety of use cases, offering innovative ways for brands to connect with consumers, push special offers, and learn about their customers through spend data. Having flexible payment options in place is critical to both re-engaging with customers on their terms and finding out exactly what those terms are by tracking consumer preferences.

I mentioned that our “new normal” is under construction, but that doesn’t mean I envision a time when the rebuilding stops—though I’m optimistic that we’ll soon begin to resume activities and regain confidence on multiple fronts. The need to keep innovating, adapting, and accommodating consumer preferences in flux is ongoing, and in order to thrive, organizations must always be at work on creating and supporting the next new normal. Ultimately, it’s the drive to create commerce experiences that are even more adaptive and inclusive of diverse choices that will help the business community move forward and most importantly, do an even better job of serving their customers.