COVID impacts on payment industry globally

The events of 2020 resulted in momentous change for the payments industry in APAC and worldwide. As a result of the global pandemic, trends identified this time last year as emerging have been hugely accelerated beyond predictions. The retail business witnessed cash use decline amidst revelations that cash handling could spread infection. 

COVID impacts on payment industry globally
With people looking to reduce contact with physical materials, they reached for contactless options wherever possible. For retail, this meant a shift toward online purchasing and where necessary. According to industry research, 56% of global consumers used a new payment method in the first month of the pandemic. One of these new payment methods is Buy Now Pay Later (BNPL).

Buy Now, Pay Later services, have become popular in Australia by larger companies like Zip, who were last year named as the fastest growing online payment method. Predominantly an online payment option that allows consumers to pay for goods and services in interest-free payment installments, some have even made their way in-store. Buy Now Pay Later differs from hire purchase because the customer owns the goods on purchase, but the due date for goods payment is simply delayed.

While the economy is not expected to recover to pre-COVID-19 levels for some time, the cautious consumer spending trend is continuing into 2021. Therefore Buy Now Pay Later is certainly a payment method that online merchants need to strongly consider offering to consumers in 2021 and beyond.

Disruptions to brand loyalty have created a wealth of opportunities for businesses of all sizes, pushing them to take their operations online and transcend borders. More customers are now online than before, some for the first time, and they're looking for products and services that suit their specific needs. Plus, they don't really mind where they find them.

Consumers want a different way to pay, and they're demonstrating this desire in the shift from credit to debit and the use of Buy Now Pay Later services. While 2021 continues to be another challenging year for the global economy where people struggle through lockdowns and further restrictions, the future for modern payment methods will certainly be bright.