How innovative brands are filling gaps in the commerce ecosystem
By Mica Moseley, Chief Revenue Officer of Arroweye Solutions
A dramatic increase in contactless and digital payments has been well documented over the past several months as people sought out safe and convenient ways to pay for goods and services from afar.
Consider these eye-opening stats:
- Increases in online and mobile commerce, especially in the retail and restaurant industries; where digital payments have gone up by as much as 30% during the pandemic;
- Accelerated digital wallet adoption, which is as high as 88% in some markets, according to recent research from Blackhawk Network;
- The number of cashless businesses in the U.S. – those that stopped accepting cash entirely – increased 23% between March 1 and April 23.
In the current payment ecosystem, there’s a lack of connection between cash and digital payment methods—and these types of payments are not accepted everywhere. After all, you can’t pay for DoorDash with cash.
Payment cards bridge these gaps because they can be loaded with cash and then spent digitally, giving cardholders the freedom to spend where they want. As people and businesses continue to adapt to current circumstances, the plastic card at the core of each of these payment accounts remains central to the consumer’s convenience, security, and safety.
Banks, fintechs, and non-financial businesses are using plastic payment cards to ride the digital wave in five key ways:
- Enabling plastic payment cards for digital and contactless spending. Dual interface cards that can be used for contact or contactless payments give people the flexibility to connect with the digital economy when they want and need. Plastic cards that can be uploaded to a mobile wallet or apps for online spending or in-store contactless redemption are increasingly popular. They are also ideal for online shopping or even using over the phone (yes, some people still call to order pizza or pay bills) for those who like the option of paying via more traditional methods.
- Connecting to cash-reliant populations. Millions of people still use cash out of preference or necessity. But as circumstances have changed, plastic payment cards enable these populations—including the approximate one quarter of U.S. households that are under- or un-banked —to gain access to essential digital spending channels. They also help the increasing number of cashless businesses keep “cashflow” moving for customers who may not have access to, or prefer not to use, digital payments. Plastic payment cards can reach those who aren’t yet living digital lifestyles and connect them to the digital economy in a comfortable, secure way.
- Connecting to cash-averse populations. Conversely, COVID has also changed peoples’ perceptions of cash and many now view cash as unclean or inconvenient. Research found that 60% of Americans plan on using digital or touchless payments instead of cash and/or coins in the future because of COVID. Research from Netspend found that people are using less cash; its cardholder data shows that YOY cash withdrawals are down 10% from 2019. There’s also a cash and coin shortage right now to compound the disillusion with the “cash is king” mentality. Plastic payment cards are a tried-and-true payment option that can address these growing concerns while enabling people to continue spending in a way that makes them feel safe.
- Launching new programs or quickly meet emergency needs. Unprecedented events, like the pandemic, generate new and unique market needs and innovators are stepping up with new solutions. Businesses are acting quickly and putting new cards in people’s hands in record time, from distributing millions of dollars in critical financial aid, to providing customers, employees and others with new ways to make payments or receive funds.
- Satisfying peoples’ need for speed while reinforcing your brand. Plastic cards can be delivered quickly for fast redemption—reinforcing positive brand engagement soon after cards are earned and received. Today’s society has a thirst for near-instant gratification and plastic payment cards can be printed, issued, and delivered in as little as a couple days, not weeks or months. They can also be personalized with your brand’s logo, the recipient’s name, and other effects to leave a lasting impression.
Plastic cards remain at the core of financial services today as a way to connect with new customers, engage existing ones, and drive brand value. And they are a vital component of the digital and contactless revolution—don’t overlook them as powerful tools not just for payments but for helping your brand stand out.
This article originally published in Global FinTech Series.
