Beyond chip and pin: the payment trends moving into the media spotlight
From social commerce to crypto adoption, the retail payments space has changed massively since the start of the pandemic as consumer demands and payment preferences evolve at pace. A rapidly escalating cost-of-living crisis is further placing payments higher on the agenda for media as consumers grapple with tightening budgets and their ability to manage their spending.
Responding to these transformative forces, retail media are keeping a close eye on the latest developments in the payments space, and how providers are innovating to support consumers. We run through several of the key emerging trends.
The emergence of social commerce
During the pandemic and global lockdowns, our mobile devices were our strongest links to the rest of the world. Usage of social media sky-rocketed during the period and so did the emergence of social media as a platform to buy goods.
The emergence of virtual storefronts has seen companies like TikTok and Meta become early leaders in this $1.2 trillion industry opportunity through new features such as the TikTok shop and Instagram shopping. It is easy to see why this is popular among consumers with single-app shopping cutting out the need for third-party websites by integrating embedded payment methods to create a seamless customer experience.
Such a change is clearly in the media spotlight. For instance, Retail Gazette recently covered TikTok’s partnership with pandemic-hit Pasta Evangelists. Overall, social commerce was reported on by UK media over two and a half thousand times in 2021, showing the growing interest in this emerging retail payments trend.
Accelerated adoption of BNPL
As consumers look for greater flexibility across payments, Buy Now Pay Later (BNPL) continues to be under the media’s gaze. So far this year, mentions of BNPL in the UK media have grown 72% compared to a year ago.
From the impact of prospective regulation, to credit checking, leveraging open banking and adoption by incumbent banks, the emergence of BNPL provided a rich seam for media to mine. It will continue to be a focus– not least within the context of the cost of living crisis and rising interest rates. Journalists will be closely watching how the consumer use of the product changes in the months ahead, what impact squeezed household finances will have, and how it compares to use of traditional products such as credit cards.
But as BNPL matures and new retail use cases emerge, we also expect the conversation to shift. For instance, recently, Charged Retail reported on Westfield’s partnership with BNPL firm Clearpay as the shopping centre aims to offer customers more flexibility in-store as well as online to keep up with the demand for a blended retail experience.
The rejuvenation of the in-store experience post-pandemic
Post-pandemic, the high-street is seeing a resurgence as consumers increasingly demand access to in-store shopping. Whether this is via creative pop-ups offering exclusive events or high-street shops, shoppers are still looking to try items in-person and assess quality before purchase. This is reflected in a recovery in high-street footfall since the lockdowns.
In response to this trend, stores have had to build a seamless in-person experience in order to match the journey offered online. Artificial intelligence is playing a big role in this. In May, Mastercard hit the headlines with the launch of their biometric payment systems which enables customers to pay by smiling or waving their hand. With growing discussions around “Pay by Voice” via mobile banking apps, it is an exciting time for payment providers who are meeting the challenge of supporting a blended shopping experience. Such tangible consumer-facing innovation will get more airtime in the future.
Adapting to ESG in retail
With increasing interest in the carbon footprint of retail, eco-conscious spending has risen up the consumer’s agenda, especially among Gen-Z audiences. According to a global study by Mastercard, three in five consumers have become more conscious about how their actions can impact the environment than ever before, with Gen Z and Millennials leading this trend.
As awareness of personal carbon footprints grow, some providers have offered consumers their own carbon tracking tools. Natwest’s in-app tracking tool will also advise consumers on where their purchases are coming from whilst encouraging people to shop in a more sustainable way by sharing information on how they can reduce their carbon footprint.
Retailers are adapting to provide a more streamlined consumer experience whilst responding to changes in attitude on sustainability. How ESG concerns, retail and payment experience and consumer spending habits intersect will be a theme to watch.
Looking to the future
A number of retail megatrends are coming together to create a golden opportunity for both retailers and payment providers to showcase how they are innovating to support shoppers, and demonstrate how they are adapting to a rapidly changing set of consumer needs. Education will be central, as journalists seek to understand how new and forward-thinking technology will deliver in practice for shoppers. But it is a crowded field, and clarity of narrative, focus on customer outcomes, and creative storytelling will be vital to standing out.
Read more about how MHP has helped payment brands stand out in the media, or contact us here if you’d like to learn more about our work.