In today’s rapidly evolving retail landscape, a significant transformation is underway in the realm of in-store payments. This shift is being fueled by the growing popularity of alternative payment methods, such as Buy Now, Pay Later (BNPL), and digital payment solutions. Consumers around the world are now diversifying their payment preferences beyond traditional options like cash, credit cards, and debit cards. Instead, they are increasingly embracing cutting-edge digital payment solutions, including tap-to-pay, smartphone payments, contactless transactions, QR code payments, and digital wallets. These changes in consumer behavior are driving a demand for more efficient and time-saving Point of Sale (POS) systems, prompting many merchants to transition from traditional hardware to smart POS and soft POS systems.
According to our latest report, “Global POS Payment Method and Trends 2023,” soft POS transactions are projected to exceed 400 billion by 2027, with a robust double-digit Compound Annual Growth Rate (CAGR) expected between 2022 and 2027. Consumers globally are quick to adopt these innovative digital payment methods. As of April 2022, over half of the surveyed respondents reported reducing their reliance on cash. More than one-third of in-store shoppers are now inclined toward contactless payments and digital wallets.
Interestingly, even spaces traditionally dominated by cash and card transactions, such as gas stations, restaurants, clothing stores, and takeaway outlets, are experiencing a surge in contactless payment adoption. Retailer mobile apps are also playing a significant role in this transition, with over two-thirds of consumers estimated to use them for contactless in-store payments in 2023, marking a 6% increase from 2022.
Tech giants like Apple and Google have joined the movement, introducing convenient Tap to Pay features. Apple’s Tap to Pay feature, launched in February 2022, allows shoppers to make payments by simply tapping their iPhones against the merchant’s device. Google’s Google Wallet complements Google Pay and aims to foster the growth of POS technology. These shifts toward digital payment methods are not limited to a specific region. In the United States, digital payments are gaining traction for both online and offline purchases. As of August 2022, nearly one-third of respondents expressed their willingness to use multiple digital wallets. Popular choices for in-store payments include PayPal, Apple Pay, and Google Pay.
Europe, too, is witnessing a transformation, with domestic digital wallet players making significant strides. For example, Mobile Pay, introduced by Danske Bank in Denmark, has formed partnerships with Vipps in Norway and Pivo in Finland, contributing to the growing landscape of digital payment options. In addition to digital wallets and contactless payments, self-service payment technologies like scan-and-go and self-checkout are gaining widespread appeal. Almost half of respondents find these options appealing, and consumers worldwide are increasingly adopting them for their convenience and contactless payment experiences. In the UK, over 60% of consumers reported using retailer mobile apps for mobile check-out and scan-and-go payment options as of February 2023.
In conclusion, consumers across the globe are gradually transitioning away from traditional POS payment methods in favor of secure, convenient, and efficient contactless payment options. Embracing these digital innovations is essential for both consumers and merchants to stay at the forefront of the evolving shopping experience.