• EFTPOS & Point of Sale Solutions

Payments Trends: How Will Your Business Be Impacted?

7 min. read28.01.2022
By Team Zeller

Use of alternative payment methods is skyrocketing.

In the digital world, change is rapid. Payment options and alternatives are frequently evolving — as are your customers’ expectations. People expect to be able to transact with the businesses they buy from, quickly and conveniently, no matter which payment method they choose. Some may even go as far as to only transact with those businesses that accept a particular method of payment.

As consumer preferences continue to evolve, it’s going to become increasingly difficult and time-consuming for businesses to play catch-up. Those that keep themselves informed of these shifts in expectations stand the best chance of winning and retaining customers in the competitive small business world.

Welcome to Payments 4. X

A new age is dawning within the payments industry. This era, dubbed “Payments 4. X”, will see a focus on personalised customer experience, industry consolidation and new tech industry players — offering business owners and their paying customers alike “smarter experiences and smarter interactions”. But what sparked the change?

Payments 4. X has been ushered in by an unprecedented push for contactless payment options, faster transaction settlements, and foolproof security. The most straightforward explanation of the shift comes from Capgemini's 2021 Global Payments Report, which provides an in-depth look at how payments have changed over the last year, as well as the various ways in which the COVID-19 pandemic has shaken the industry up and created new opportunities for merchants to improve the way they run their business.

Access the entire global report online, or keep reading for the short version: a distillation of 5 payment trends that will likely impact small business owners in Australia as we enter the age of Payments 4. X.

1. Connected systems

The success of any business hinges on its people, processes, and systems. As new tools and apps continue to be developed, the success of a business will increasingly depend on its tech stack.

The ecosystem of tools you piece together will impact everything from how you communicate with your customers, to the ease of running promotions, to the time it takes to report on business performance. Integrating your EFTPOS terminal with your point-of-sale system, for example, will enable you to select a customer’s item on-screen and have the transaction amount immediately appear on your terminal — ready for the customer to tap, dip, or swipe to pay.

An interconnected system will also make real-time data accessible, enabling you to make quick decisions for the betterment of your business. For your customers, connected systems mean a better experience; more personalised, more efficient, more fulfilling.

As tech companies continue to develop products built on the software-as-a-service model, businesses of all shapes and sizes will be able to create their own modular value chain of tools. This plug-and-play tech will enable those merchants who spend time comparing and selecting tools that work well together to save time, build better customer relationships, and grow profits.

Perhaps most importantly, spending the time to find the right systems will enable you to run your business in your own unique way.

2. A new type of consumer credit

Buy Now, Pay Later schemes (BNPL, for short) are exactly what they sound like. A customer can buy a product now, for a small amount of money, and pay the balance later — no need to wait for payday. In removing these hurdles for customers, they’re more likely to spend.

An American study found that businesses that offered their customers to option to buy now, pay later experienced a 20 to 30% uplift in conversion rates. 80% of those that began offering BNPL saw an increase in the amount customers spend in-store.

Unsurprisingly, BNPL has exploded in popularity — especially amongst younger generations, where trends come and go quickly. The way they’re using the platforms demonstrates a clear preference to debit over credit; according to Afterpay, 94% of its Gen Z users are opting to buy now, pay later using their own money rather than link their account to a credit card. This is the same generation that commonly reaches for their phone or extends their wrist when it comes time to pay.

Anyone with a bank account that meets a set of standard eligibility criteria can sign up for a BNPL scheme to buy whatever they want at stores that accept the payment method. Essentially, that means anyone over the age of 18, with a bank account, who passes a credit risk check can use BNPL.

If your business doesn’t already accept BNPL as a method of payment, consider whether 2022 is the year to start. It could be a way to reach a new subset of customers whose spending power is increasing with time, and grow your profits.

3. No more cash

The pandemic has hastened the pace of cash’s decline even faster than predicted. In 2020, cash was used for just 20.5% of transactions at a point of sale across the globe. That’s a 32.1% reduction in cash use since 2019. Companies like FIS, for example, previously speculated we would reach these levels in 2023; the pace of decline is three years ahead of schedule.

In Australia, we are even further ahead of the pack; cash has been approaching legacy status as a payment method for years. Cash is used for less than 20% of point-of-sale transactions in the Asia-Pacific region, and it’s expected that by 2024 it will account for less than 10% of those transactions.

So, how are consumers paying? With their new limb: the mobile phone.

Nearly 45% of consumers say they frequently used their mobile wallet to pay for things in 2021 — meaning almost half of consumers reached for the mobile wallet upwards of 20 times. A year prior, just 23% of consumers did the same.

This is good news for businesses; the less frequently your customers pay with cash, the less time you’ll spend counting your cash drawer, visiting the bank, and waiting to be able to put those funds to work. Instead, simply accept payment through Zeller Terminal and the funds will be available in your Zeller Transaction Account the very next day. Spend them using your Zeller Mastercard.

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4. Innovative forms of payment

There’s no question that COVID has accelerated the adoption of digital wallets while speeding up the decline of cash. However, consumer payment preferences are growing increasingly diverse.

With Payments 4. X ushering in an accelerated transformation timeline, every business owner needs to take stock. How will your customers expect to be able to pay in 12 months’ time? Credit card use is expected to flatline.

There’s an abundance of payment methods available, and more to come. What was once considered an ‘alternative payment method’ — such as a digital wallet attached to a mobile phone or smart ring — is now mainstream. Cash won’t simply be replaced by credit cards and mobile wallets. Remember, the technology powering NFC-reliant digital wallets is still in its infancy.

As younger generations embrace these newer payment methods with gusto, the trend accelerates — indicating there’s more change to come. Is your business prepared?

Convenience is key; when a new payment trend emerges, you’ll want to ensure your EFTPOS terminal can meet your customers’ needs by accepting whatever form of payment is most convenient.

5. An even faster pace

The pace of innovation and competition within the industry has sparked a change in consumer expectations: everything must happen quickly. Near instantaneously.

Consumers have gotten used to fast transactions, and are increasingly expecting the process to become faster and faster.

In this instance, a ‘consumer’ in a digital transaction refers to both:

  1. the customer of the bank (i.e. the business carrying out the transaction and accepting funds)

  2. the customer of the business (i.e. the person who is making a purchase).

Both expect the transaction to happen swiftly, meaning instant payments and quick transaction settlements are already table stakes.

Businesses need the ability to quickly and seamlessly process transactions, so customers can pay and continue with their day without disruption. This includes the ability to quickly identify the reason for a declined transaction, and being enabled with the information to quickly correct the issue and progress the sale.

However, increased transactions volumes and instant processing requirements are stretching the banks’ decades-old legacy payments infrastructure. Nimble payments providers will be able to adapt to change and offer their users the most forward-thinking solutions, so that you can offer your own customers a great payment experience.

Preparing your business for Payments 4. x

The picture the Global Payments Report paints is overwhelmingly positive, despite the obvious challenges. Innovation is opening significant opportunities for payment providers to step up and differentiate themselves as forward-thinking companies that can keep up with the pace of change, and build the functionality that enables businesses to take advantage of those changes.

As a merchant, it’s up to you to ensure that every one of your customers has a positive payment experience. Whether you are able to accept a customer’s method of payment, troubleshoot a declined transaction, or even continue operating in a thunderstorm depends on your EFTPOS provider.

It's an important choice that will have an impact on the way you run your business for years to come.

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The Retail Transformation: What Do Shoppers Want?

Discover how to meet the ever-evolving needs of shoppers. Retailers are no strangers to disruption. Every 50 years or so, the industry goes through a significant period of change. 200 years ago, Mum-and-Pop shops lined the streets. They were community-anchoring, catch-all drug and general stores, selling anything and everything a person might need for daily life. 150 years ago, the growth of big cities and the rise of railroad networks led to the rise of the first modern-day department stores. Think David Jones, and Myer. 100 years ago, mass-produced automobiles made suburbia more accessible, and appealing. Soon after, shopping malls and high streets formed — posing a challenge to city-based department stores. 50 years ago, in the 1960s and 1970s, discount chains began spreading like wildfire across major cities, transforming the retail landscape once more. Each wave of disruption poses a challenge to retail store owners. While these shifts do not eliminate what came before, each reshapes the landscape through redefined consumer expectations and new entrants to the markets. History proves the retail merchants that thrive are those that are able to adapt to the times, and adopt the latest technology to gain a competitive edge. Adapting to the next normal in retail Every retailer has, to some degree, a sense of what the future of the retail industry could look like — stores morphing into showrooms, with products being shipped out by drones; shoppers making purchases from anywhere, at any time, via whichever device is most convenient for them; perhaps even robotic, roaming mannequins treating walkways as a cat walk. Some are more likely than others to eventuate. Yet what seems futuristic and fanciful in 2022 may one day become the norm. There’s no doubt financial services technology will continue to develop at a fast pace, and your customers will be paying with different devices in the future. Shoppers are already using mobile phones, smartwatches and smart rings to pay for their purchases with a single tap. As shoppers grow to expect more and more from the brands they choose to support, retailers are increasingly needing to consider the customer experience and how to turn shoppers into loyal customers. The 5 trends shaping the future of retail 1. Speed and convenience Speed and convenience will be defining qualities of a top shopping experience. Your customers are becoming less patient, and place increasing importance on the ability to make purchases quickly and easily. Patience for lagging systems and long queues is waning. Every customer must be able to pay for their purchase quickly, in the most convenient way for them. The ability to place orders over the phone, and collect items curbside, is key — as is having the items they expect in stock. Having the ability to take payment via a mobile EFTPOS terminal , from wherever your customer is in-store, will help to alleviate the inconvenience of queues and enable shoppers to ponder additional purchases for longer. Retailers that simplify the purchasing process, and deliver products into their customers’ hands faster, will generate customer loyalty and benefit from repeat purchases and positive word-of-mouth. Many of these efficiencies will be made possible through a powerful, integrated retail POS system . 2. A personalised shopping experience A personalised shopping experience will be a key competitive differentiator. Time-poor shoppers want to know when you start stocking a new product that meets their needs, and have the option to streamline repeat orders. Similarly, their loyalty should be tracked and rewarded. Forward-thinking retailers will use these customer insights to inform their stock purchases, and highly targeted marketing activities. An integrated payments system will enable you to do all of the above, and more. Those retailers that take the time to understand the customer journey, and leverage intelligent tech tools to personalise that journey wherever possible, will come out on top. 3. A shift in spending power Millennials may be the largest consumer group currently, but there’s another generation garnering increased spending power: Gen Z. Discovering what drives a young consumer to shop with one brand over another is key to the long-term success of your retail store. The youngest generations of shoppers tend to be loyal to brands that value honest communication, recognise the environmental impact of their business, and make moves to alleviate that impact in some way. It could be through sustainable packaging, donation drives, or something different entirely. Transparency in production lines will also help to generate brand loyalty; your shoppers want to know where their purchases come from. Every retailer should take the time to understand the mindset of the consumers who control the largest chunk of the purchasing dollar. Retailers need to evolve with that high-value consumer to hold onto their brand relevance in 2022 and beyond. 4. Support for smaller brands In recent years, there has been a clear shift away from department stores. Fewer consumers are shopping with big brands, and instead are choosing to spend with local stores, boutiques and smaller brand name shops. When it comes to agility, smaller brands have the upper hand. With no boards or shareholders to answer to, or long-engrained brand values and traditions to consider, small retailers can adapt to consumer trends more quickly — whether that is by introducing new, simpler ways to pay, new product lines, innovative advertising strategies, or something else entirely. While larger brands will struggle to stay relevant, independent retailers can (and should) take advantage of the fast pace of change to deliver exceptional, modern consumer experiences. 5. Frictionless payment experiences A frictionless payment experience will be a key component of a positive shopping experience. In simplest terms, that means every shopper should be able to pay: wherever they want — in-store, online, over the phone, or curbside using whichever method of payment, and device, they prefer with one tap. If shoppers are required to pay a surcharge, they shouldn’t be financially penalised for choosing one payment method over another. For retailers, that means it’s even more important to seek out one low transaction rate — like that offered by Zeller. In future, payments may be able to be made through iris scanning, fingerprint recognition or even facial identification technology. The opportunities are endless. For now, it’s imperative that your store’s EFTPOS machine is able to accept payments made through digital devices, such as mobile wallets. Increasingly, the ability to accept payment via QR codes will become critical as more consumers adopt the likes of AliPay and WeChat Pay — both of which are already popular among tourists. Change is inevitable, yet the aim of retailers remains the same: to make the shopping experience more convenient for the customer. New technology will continue to emerge to enhance the customer experience, streamline payment processes, and offer retailers new ways to win and retain customers. Retailers will have to work hard to meet the ever-evolving expectations of shoppers. However, those that do will solidify their brand position amongst the next generation of shoppers, and be rewarded with customer loyalty for years to come.

The Future of Payments: Zeller's Take on Emerging Trends

As the world of payments continues to evolve at a rapid pace, businesses need to stay ahead of the curve to ensure they are providing the best possible experience for their customers. Cash has been on a well-documented decline since the mid-2000s, which was accelerated by the COVID pandemic. At Zeller, we design and build payment and financial solutions to meet the changing needs of business owners at any stage of their journey. We spoke to Zeller's Head of Product, James Vatiliotis, about the payment trends that we see shaping business in 2023 and beyond. Industry-specific payment solutions One-size-fits-all payment solutions are becoming a thing of the past. Industry-specific solutions are gaining traction because they provide products tailored to the unique needs of different businesses. An example is Pay at Table for the hospitality industry. By allowing customers to pay at their table, busy restaurants are able to turn over tables more quickly resulting in increased revenue, whilst also reducing bottlenecks at the point-of-sale system with many customers wanting to pay at once. Surcharging is helping to offset rising economic costs Across the board, we are seeing an increasing number of merchants choosing to pass on the cost of their EFTPOS processing fees to their customers. Although surcharging is divisive, there is an argument to say that it provides a degree of transparency. For business owners facing increasing operating costs, surcharging provides a flexible option to reduce expenses. Ultimately all costs incurred by businesses need to be recouped in their pricing, so whether it's blended into the cost of the item or added as a surcharge the result is the same. Big businesses like Aldi have been applying surcharges for years, so Australian consumers have become increasingly familiar with the practice. It is a commonly used feature of Zeller Terminal , however, you can choose to use it, switch it on and off as it suits, or surcharge only part of the transaction fee. Accepting card payments in more ways than ever The launch of contactless payments on commercial devices like tablets and smartphones (CPoC standard) is a game-changer. Soon, merchants will simply have to hold out their phones and invite customers to tap their physical or virtual cards to process a payment. This is just the beginning of a new wave of payment innovation, and we're sure to see mobile kiosks, point-of-sale tablets, and a number of other devices follow. Wallets may soon be a thing of the past Mobile wallet transactions make up over 25% of in-person payments in Australia. With Medicare already cardless, cash acceptance declining and some states launching digital licenses, soon there may not be a need to take a wallet at all. We have witnessed this trend in our own product suite, with virtual Zeller Debit Cards making up approximately 50% of all cards created by our merchants. Our virtual cards can be created on the Zeller App or Zeller Dashboard and added to your digital wallet in minutes, ready to be used. The NPP has proven its abilities Since launching in 2018, the New Payments Platform (NPP) has over 90 million customer accounts processing more than $1 billion. The NPP is open access infrastructure for fast payments in Australia – the platform enables innovation by fintechs and other companies building on top of this network. The introduction and uptake of the NPP means that Australia is unlikely to see the introduction of a closed network payment system like WeChat and Alipay. This is not to say these products definitely won’t have uptake in Australia, but their value proposition would need to be more than real-time money movement – since this is possible through the NPP. We are always keeping an eye on emerging trends in payments to ensure Zeller provides the best possible solutions for every business. It is exciting to compare the payments landscape in Australia to what it was ten years ago and imagine how it might be in the years to come as innovation and our access to technology accelerates. Article written by James Vatiliotis, Head of Product at Zeller

Top Payment Trends to Watch this Festive Season

The holidays are almost here, and with them comes a big surge in shopping, gifting, and payments. As consumers become ever-increasingly tech savvy, businesses are adopting new trends to enhance the shopping experience. With that in mind, here are five payment trends to keep an eye on this holiday season and into 2025. 1. The takeover of mobile wallets This year, more Aussies than ever will leave their physical wallets at home when they head out to do their Christmas shopping. Consider the following three statistics: In 2022, 30% of in-person card payments were made via mobile devices, up from 10% in 2019. Source: Reserve Bank of Australia Over 15.3 million cards were registered to mobile wallets in 2022, a 760% increase from 2018. Source: Australian Banking Association. A 2022 survey revealed that 69% of Australians felt confident enough using mobile wallets to leave their physical wallets at home. Source: Marqeta If we piece those three stats together, it’s clear to see the shift away from physical cards, and towards mobile wallet payments, is continuing to pick up speed. Make sure your business is set up for seamless electronic payment acceptance, whether your customers are tapping with their card or mobile wallet.  Zeller Terminal  equips your business to accept physical cards as well as mobile payments via smartphones and smartwatches. 2. Selling via social From Instagram and TikTok offering in-app shopping experiences to businesses selling solely via Facebook Marketplace and Instagram DMs, social platforms have become key places for payments to take place. Payment Links , which are built right into Zeller Virtual Terminal , are perfect for  businesses selling on social media. This handy tool lets you easily generate a secure, clickable payment link that you can simply send to your customers in a DM. We’ve seen many innovative artisan businesses utilising Payment Links to sell quickly and easily via social media, without the need for a permanent, e-commerce enabled website. Instagram or Facebook Marketplace + Payment Links will help set you up for success, too. 3. Enhanced fraud protection They might call it the silly season, but with the sophistication of fraudsters these days, you don’t have to be silly to be scammed this Christmas. Thankfully, the payments world is fighting back with advanced fraud detection tools, including AI-powered analytics and biometric authentication. For shoppers, this means increased protection of their funds, and for businesses it means fewer chargebacks and losses. Learn more about how Zeller keeps you and your customers safe here . 4. Accepting payments via Tap to Pay Turning a smartphone into a payment terminal can be a game-changer for small businesses. Tap to Pay works on selected iPhone and Android smartphones, making it super simple to take payments wherever you are with just a mobile app, or even to use as a second EFTPOS machine when things get busy. While Tap to Pay is still an emerging innovation in payments, we’re already seeing many mobile businesses adopt it as a way to accept payments in lieu of sending online invoices or carrying an EFTPOS terminal with them at all times. 5. The inexorable rise of self-checkout As we move into 2025 and beyond, expect to see more self-service kiosks, from fast food restaurants through to airports, department stores, supermarkets, universities… you name it. Couple this with QR codes on pub tables and cafe menus, one thing is clear – love it or hate it, self-checkout is only going to become increasingly common. With advancements in self-checkout technology making it easier for smaller businesses to set up a kiosk too, we’re looking forward to seeing this innovative new technology in a wider variety of scenarios. If you’d like some expert advice on setting up your business with the right payment and POS solutions for this festive season and beyond, speak to the Zeller Sales team .

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