By Yair Nechmad, CEO & Co-founder of Nayax
The world of payments is quickly evolving, with a noticeable shift toward cashless and digitalized payments. These changes are due to both advances in secure payment technologies and consumer demand for safer and more personalized payment methods. As we enter this new era, business owners and investors need to look for new ways to adapt to these demands, treating payments as strategic and catering more to each individual customer.
Over the past two years, the world's economic, political, and social structure has shifted in response to the COVID-19 pandemic. This greatly impacted the world of payments, as many businesses and consumers moved to contactless and digital payments to avoid handling cash, a known carrier of germs. Unattended retail grew, as it allows not only contactless transactions, but limits human interaction, is more convenient and can be open 24/7.
The rise of contactless has boosted the shift towards cashless and digitalized payments, with many new payment technologies such as digital wallets coming into the market. As borders open and travel restrictions continue to be eased, many of the changes that took place over the past two years are here to stay. Now, with the added value of personalization, there is much more to come.
Digital wallets enable customers to leave their home without their wallet, making purchases with their phone. The fact that the payment method exists on an individual’s phone allows businesses to create personalized loyalty programs built into these wallets. Digital wallets also enable users to make online transactions and can be used in both open and closed loop environments, creating a lot of space for growth and development.
This industry is expected to continue to grow both in popularity and in personalization. Investors in this technology need to keep customers at the forefront of their minds as new technologies and understanding of customer wants, expectations and demand continue to develop. Personalization can help increase customer engagement and loyalty with punch card or marketing campaigns, top-up bonuses, personalized discounts, alerts, push notifications, and more.
A cashless society is truly becoming global, with developing countries leapfrogging into the cashless model. Cashless transactions are seamless, quick, and enable a better customer experience. If a customer sees, for example, that a merchant doesn’t accept their preferred payment method, they will most likely walk out, and the business will miss out on a sale.
Cashless payment acceptance also enables for easier international transactions to take place, allowing for buyers to make purchases in various currencies without having to exchange money, helping to eliminate the middleman and prevent theft.
Security remains a major concern, with privacy issues and the safety of tech coming into question. These issues do need to be addressed, and new laws are coming into place to protect individuals’ privacy. Despite these concerns, cashless payments still do lower rates of theft and crime, and encrypted transactions such as EMV ensure consumer safety.
The world is continuing to move toward a cashless society, investors and business owners need to keep their customers at the forefront of their overall business or investment strategy. The key is not only to offer cashless payment options, but to accept multiple payment methods and currencies, and most importantly: to enable personalization features. This fosters true consumer engagement resulting in more satisfied customers, leading to increased revenue.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.