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The payments industry is going through a significant transformation, with various technological advancements and changes in consumer behavior driving new and innovative payment strategies. At PSFK, our researchers have recently compiled a report that delves into the latest trends in the payments industry, exploring the opportunities and challenges they present for businesses.
The payments landscape is rapidly transforming due to several drivers, including the pandemic, growing trust in digital payments, Buy Now Pay Later options, community-powered payments, data personalization, decentralization, and the use of blockchain technology, and NFTs.
These drivers are transforming the way we pay, with a focus on convenience, security, and personalization, and they are also creating new opportunities for businesses to interact with their customers. By understanding these themes, businesses can stay ahead of the curve and provide their customers with an exceptional shopping experience.
The world of commerce is changing rapidly, with evolving consumer preferences and technological advancements driving new payment strategies for retailers and brands. These innovative approaches include community-building and shared ownership, conscious consumption and sustainability, digital assets and cryptocurrencies, democratization of financing, unification of finances and rewards, and enhanced security and personalization of transactions. PSFK researchers identified emerging payment strategies, their opportunities, and challenges for businesses in the modern retail landscape.
Fractional ownership models are fostering community building and shared ownership, enabling businesses and individuals to monetize assets while providing consumers with exclusive experiences and products.
L'Oreal's NYX has launched GORJS, the world's first beauty decentralized autonomous organization (“DAO”), to support and grow the 3D artist community. The FKWME Pass is a limited number of NFT access passes that NYX is offering to the first 1,000 members of the DAO. Participating artists will be able to get financing for their own NFT projects and digital art endeavors and will have access to other active artists in the DAO. NYX's DAO is a means of creating a community centered on beauty and creativity, bringing individuals with similar interests together while providing them with exclusive access to products and experiences.
How technology and connected consumer communities are fueling the revival of bartering and the growing movement towards a more sustainable and communal approach to consumption and commerce.
The Tesco Exchange app is a great example of how technology is driving the movement towards more sustainable and communal consumption and commerce. Bartering systems are becoming popular among connected consumer communities who are looking for more sustainable and conscious commerce practices. The Tesco Exchange app connects suppliers who have surplus items with other Tesco suppliers who require those products, reducing waste and excess inventory while providing value to consumers. Through this app, Tesco's suppliers can find innovative ways to lower expenses, cut waste, and continue to provide excellent value to their customers.
To create a new level of engagement and connection with customers, retailers and brands are rewarding customers not just for their purchases but also their loyalty, using cryptocurrencies, stock, or unique digital assets.
Starbucks' Web3 version of its Starbucks Rewards program allows a small group of waitlist members to participate in interactive “journeys” and collect polygonal NFTs as journey stamps. These NFTs provide customers with a unique, digital asset as a reward for their loyalty, and they can accumulate Odyssey Points that will grant them access to future benefits and experiences. This example showcases how digital assets like NFTs are being used as a loyalty reward and a new way to engage customers.
New technologies and services are giving consumers access to new financing options while crowd-sourced finance and web3 platforms are providing a more accessible and favorable alternative to traditional payment methods.
How retailers are offering digital wallets that simplify the shopping experience, provide greater value to shoppers and make it easier for customers to manage their rewards and points.
Amazon's new digital wallet service for sellers provides a convenient way for sellers to hold and transfer their sales proceeds, streamlining the process of managing finances. The service is already available to a select group of small business sellers, demonstrating how digital wallets can be used to provide value and simplify the financial management process for businesses.
Further adoption of biometric technology is enhancing the security and personalization of the shopping experience, creating greater opportunity for retailers to personalize the shopping experience for customers.
Within stores that partner with Mastercard, consumers will be able to pay their bill by smiling into a camera or waving their hand over a reader. These biometric checkout services can be offered either online or in-store through the merchant or through an identity provider app. Mastercard is pitching this new program as a more hygienic, secure payment method. Plus the service also allows for loyalty program integrations and personalized product recommendations for consumers.
This report explores new payment trends that are revolutionizing the retail industry, including fractional ownership, bartering systems, value-generating transactions, access to rapid and decentralized finance, digital wallets with expanded features, and seamless payments. These trends offer retailers and brands new opportunities to monetize their assets, engage with their customers, and provide new and innovative ways to finance purchases. By understanding these trends, retailers and brands can stay ahead of the curve and provide their customers with the best possible shopping experience.