As the one-year mark of the Covid-19 pandemic passes and digital payments play a larger role in daily life around the world, there will be no reverse gear on consumer behavior as we head into 2021. In the third edition of its global research study, the "Visa Back to Business Study - 2021 Outlook," Visa (NYSE: V) found that the continued small and micro business ("SMB") shift towards digital commerce will evolve in the New Year and bring an increased focus on areas such as security and fraud prevention, and more emerging payment tools such as 'buy now, pay later' and mobile payment acceptance.
According to the study, by the end of 2020, 82 per cent of global SMBs surveyed had embraced new forms of digital technology to meet changing consumer behaviors. Looking ahead to 2021, SMBs are assessing what other payment technologies are critical to meeting today's consumer expectations, with results led by security and fraud management software (47 per cent), contactless or mobile payment acceptance (44 per cent), accepting payments via mobile device (41 per cent), installments or 'buy now, pay later' (36 per cent) and digital backend payment operations (31 per cent).
"With greater hindsight into 2020, we can clearly see that the digital payment experiences that exceled the most - contactless and eCommerce - were driven out of necessity and have become more habitual in people's daily lives at a pace not often seen," said Suripong Tantiyanon, Country Manager for Visa Thailand. "If 2020 was the year of contactless and eCommerce, results of this study tell us that 2021 will bring greater attention to security and fraud prevention, and trial of more emerging digital commerce tools that help businesses thrive."
A rapid adoption of new payment technologies and changing consumer behavior related to commerce was consistent across all global markets surveyed. Additional findings from the study in Brazil, Canada, Germany, Hong Kong, Ireland, Russia, Singapore, United Arab Emirates (UAE) and United States, highlight the depth of the impact in 2020 and expectations for 2021:
The Road to Recovery for SMBs in 2021
- Contactless Payments Are Here To Stay: The global rise of contactless payments in 2020, spurred by challenges including consumers looking for safer ways to pay amidst the pandemic, is showing no signs of slowing down in the New Year. In fact, in June 2020 only 20 per cent of SMBs surveyed had offered contactless payments for the first time — now, 39 per cent report they have started to accept new digital forms of payments. Nearly three in four (74per cent) SMBs expect consumers to continue preferring contactless payments even after a vaccine is widely available.
- SMBs Meet Consumers Where They Are: SMBs have steadily increased their efforts to meet consumers where they are now: online. Globally, 82 per cent of SMB owners have made updates to their operations to meet the increasing demand for digital payments, up from 67per cent in summer 2020.
- The Fight Against Fraud: Tech-savvy business owners (52 per cent) are more likely than their novice counterparts (39 per cent) to invest in security and fraud protection. Recognizing the significance of and responding to a potential fraud attack will continue to be a decided advantage in 2021 as the shift to digital sales continues to increase. Despite concern, global fraud rates remain at historic lows, at roughly $0.007 for every $1.00 .
New Year Brings a New Era for Consumer Habits
- Consumer Preference: Almost overnight, consumers put Covid-19 safety measures at the top of their shopping lists, igniting a rapid shift to touchless commerce. Two-thirds (65 per cent) of surveyed consumers would prefer to use contactless payments as much as, or even more than, they are currently. Only 16 per cent say they would revert to their old methods of payments, post-pandemic.
- Safety-Conscious Shoppers: While the universal focus is on mask use in stores, consumers are also eager to have payment alternatives to handling cash, pens and keypads. 47 per cent of consumers say they will not shop at a store that does not offer a contactless way to pay.
- At the Card Wash: Card cleanliness remains key for consumers in the fight against the spread of Covid-19. More than three in five (62 per cent) are taking steps to keep their credit cards clean; using disinfectant on their card is the top approach, at 31per cent.
Regional Insights: Making Moves to Meet Consumers
- Pivoting to meet the new digital-first era: Nearly all UAE SMBs (97per cent) and Hong Kong SMBs (96 per cent) have adjusted the way they operate in the past three months, compared to the global average of 82 per cent. In June, just two in five Hong Kong SMBs (40 per cent) were selling products and services online. Now, nearly three in five (57 per cent) are selling more online, compared to the global average of 43 per cent.
- Consumers are shopping digitally, and with an eye on security and safety: Globally, 82 per cent of consumers have taken some additional action to protect themselves from fraud, with UAE the most likely at 90 per cent. Nearly all UAE consumers (96 per cent, compared to 62 per cent globally) are also taking steps to keep their credit card clean, making them the most likely of all markets surveyed to do so.
"As the trusted engine of commerce, Visa will continue to introduce new programs and resources that advance its commitment to digitally enable the millions of SMBs around the world and in Thailand. We believe findings from our study will help Thai businesses, large and small, inspire, adapt and thrive in this new normal and accelerate Thailand's digital transformation agenda," Suripong concluded.
Methodology: Visa Back to Business Study - 2021 Outlook
The Visa Back to Business Study was conducted by Wakefield Research between November 13 and November 25, 2020, among 250 small business owners at companies with 100 employees or fewer in Brazil, Canada, Germany, Hong Kong, Ireland, Russia, Singapore, UAE and U.S. Separately, the consumer portion of the survey was conducted by Wakefield Research between November 13 and November 25, 2020, among 1,000 adults in the U.S., and 500 adults in Brazil, Canada, Germany, Hong Kong, Ireland, Russia, Singapore and UAE. The data was weighted to ensure an accurate representation of adults ages 18+ in each market.
About Visa Inc.
Visa Inc. (NYSE: V) is the world's leader in digital payments. Our mission is to connect the world through the most innovative, reliable and secure payment network - enabling individuals, businesses and economies to thrive. Our advanced global processing network, VisaNet, provides secure and reliable payments around the world, and is capable of handling more than 65,000 transaction messages a second. The company's relentless focus on innovation is a catalyst for the rapid growth of digital commerce on any device, for everyone, everywhere. As the world moves from analog to digital, Visa is applying our brand, products, people, network and scale to reshape the future of commerce. For more information, visit About Visa, visa.com/blog and @VisaNews.
Source: Spark Communications