Digital Commerce Growth Soars Past Pandemic
Retailers and consumers are doubling down on digital commerce, according to two separate studies published in May 2021, one by Blackhawk Network and the other by Capgemini and Efma. Findings show upwardly trending digital spend in multiple regions even as stores reopen after the pandemic, participating companies stated.
Theresa McEndree, global head of marketing at Blackhawk Network, observed that ecommerce and digital wallets afford easy ways to tap into mobile and digital rewards. “Our research shows that consumers around the world are drawn to retailers that offer fast, seamless and secure digital payments,” she said. “As we start to hit more of a stride in our economic recovery, the winners will be the merchants that cater to the everyday digital payment preferences of today’s shopper.”
Anirban Bose, chief executive officer, Financial Services, and group executive board member at Capgemini, has also seen a surge in fintech solutions and suggested they herald a new stage of growth for fintechs in general. “Players capable of achieving long-term growth and profitability today will be tomorrow’s FinTech-era success stories,” he said.
Strength in numbers
The Blackhawk study, released May 21, 2021, was based on a survey of more than 13,000 consumers in nine countries, including the United States, Australia, Brazil, Canada, Germany, India, Mexico, Netherlands and the United Kingdom. Researchers found 69 percent of respondents increased their spending when they began using a digital wallet, and 54 percent spent more at retailers that accepted digital payments.
In addition to spending more and having a deeper affinity with digitally enabled retailers, consumers surveyed indicated they would be more likely to patronize retailers that embrace digital payments, researchers found. Following are additional highlights from the report:
- Digital wallet segments: Digital wallet usage was highest in online-only retailers (41 percent), grocery stores (37 percent) and mass merchandisers (26 percent).
- QR codes: QR code usage rapidly scaled during the pandemic, most frequently at grocery stores and online-only retailers, with 18 percent of respondents using a QR code or barcode for the first time during the pandemic, and 40 percent using them more frequently.
- Gift cards: Digital gift card usage is gaining popularity as an easy, contactless payment method, with 34 percent of respondents purchasing a physical or digital gift card for themselves in 2020 and 46 percent being interested in using digital gift cards to make purchases online. Blackhawk researchers anticipate that in-store shopping will resume in the post-pandemic economy, noting that 55 percent of shoppers said they plan to return to stores as shopping centers reopen. Researchers also expect consumers to continue to wield their digital wallets and check out on mobile devices in physical stores.
The full report, Payments EQ: Connecting Globally Through Digital Payments is available at pages.blackhawknetwork.com/global-digital-payments-insights.html.
The World FinTech Report 2021, published May 27, 2021 by Capgemini and Efma, compiles three studies: The Global Retail Banking Voice of the Customer survey 2021, the Retail Banking and FinTech Executive surveys and interviews 2021, and the World FinTech Report 2021.
The report highlights multinational insights from banks, fintechs and tech providers in Australia, Belgium, Bhutan, Brazil, Cambodia, Canada, China, Denmark, France, Germany, Hong Kong, Iceland, India, Italy, Japan, Malaysia, Mexico, Mongolia, Myanmar, the Netherlands, Norway, Portugal, Russia, Saudi Arabia, Serbia, Singapore, South Korea, Spain, Sweden, Switzerland, UAE, the United Kingdom and the United States.
Researchers found the fintech sector prospered during the pandemic, reporting 11 percent year-over-year activity growth in the fourth quarter of 2020, after four consecutive years of decline. As fintechs become an integral part of the payments ecosystem, numerous technology startups have matured and become profitable, according to the study.
“As profitability becomes the next frontier, industry executives interviewed as part of the World FinTech Report 2021 agree with our four-stage approach to long-term growth,” researchers wrote, summarizing the steps as follows:
- Diversify offerings to build a profitable base
- Orchestrate an ecosystem or join multiple ecosystems
- Monetize via a 360-degree approach
- Expand into new markets to maintain growth momentum
Researchers additionally noted that competition is heating up in financial services, which is putting intense pressure on traditional financial institutions and service providers. Survey respondents listed faster delivery and response times, personalized services and anywhere accessibility as key factors for choosing a fintech over their existing financial institution.
A full copy of the Capgemini report is available at fintechworldreport.com.
Next Level commerce
Joseph Emig, senior vice president, financial institutions and technology partnerships at Global Payments, has also seen exponential growth in digital payments, largely driven by consumer preferences for convenience. “As the pandemic winds down, adaptations are becoming part of the new normal because they are optimizing the customer experience,” he said. “Digital commerce is giving us new momentum from a global payments standpoint and give us new ways to create customized solutions for merchants that don’t always rely on face-to-face commerce.”
Barry Stearn, vice president, partnerships at FreedomPay, agreed that retailers and consumers are embracing digital payments. “What resonates is resilience, and FreedomPay, with our partner ecosystem, has helped drive that resilience by keeping merchants flexible and agile during the pandemic,” he said. “Adaptive technologies that we rolled out in a rush, such as buy now, pay later, QR codes and contactless payment methods, have improved consumer comfort levels,” Stearn said. “As someone who works in the payments ecosystem, it’s reassuring to know we’ve played a part in enabling these new consumer preferences.”
Stearn added that he is looking forward to discussing emerging digital payment trends with executives from Visa, Sephora and Mad Mobile on June 4, 2021, at FreedomPay’s Next Level Commerce: Retail Resilience virtual conference. The free event and live Q&A will be hosted by FreedomPay and moderated by Dale Laszig, senior staff writer and content marketing specialist at The Green Sheet Inc.
To register for Next Level Commerce: Retail Resilience, visit marketscale.com/live/freedompay-next-level-commerce/.
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