No going back: The lasting impact of COVID-19 on payments

There is no possibility of retracing the changes to the payments industry in 2020, said AstroPay CEO Mikael Lijtenstein (pictured), as he explains the quick rise in popularity for all forms of digital payments – and predicts a starring role for digital wallets.

COVID-19 has affected societies and economies all over the globe. In fact, it is fair to say that it has reshaped our world. 2020 will be remembered as one of the most challenging years when trade, health, labour and technology – to name a few – have been modified. More than ever, decision makers had to keep balance between risk and opportunity, and the latter is the one we are interested in. 

Positive transformations have been driven by technology companies looking to reach new consumers among the millions of commercial interactions that are now held online. In this era of social distancing where services, education and health are provided virtually, the demand to access digital technologies is strong. 

Regarding payments, the drift towards digitalisation that was occurring has been accelerated by the pandemic. This might be the biggest change that the industry faced and there is no possibility to retrace it. All forms of digital payments are becoming popular among users, for whom digital wallets now play a starring role.

If 2020 is the year of acceleration and growth, we may say that 2021 will be the time for settlement and consolidation for fintech platforms. As the escalation has been rapid, consumers – now used to paying digitally – will demand more security and functionality to make the journey as natural as possible as well as safe. Furthermore, it will be a year of inspiration to leverage the opportunities this crisis offers to improve the way we live.

As per 2021, we believe that the focus will be on instantaneity, user experience and security. Integrated by processors, switches, acquirers, wallets, fraud and risk providers, fintechs and traditional financial institutions, the payments ecosystem has evolved – making online payments more accessible than ever.

The innovations that were led by fintechs and wallets will be accelerated in 2021, and those that provide faster and tech-friendly ways of using money and paying for services will be at the forefront.

Regarding instantaneity, there is a need to move forward in order to provide one-tap checkouts, single click experiences and automatic payment fulfilment as a concrete manifestation. The key is to understand that paying is a really complex money-moving activity that takes many forms and requires a deep understanding of customer profiles, payment methods, underlying technology and operational hazards, tailoring the user experience to make it as natural as possible.

Speaking about security, there will be modifications on how it is applied along the user experience. The user identity will probably be handled as a continuous relationship between user and service provider, enabling the implementation of a truly end to end one-tap experience.

User experience, as we have mentioned in previous articles, is paramount to generate engagement and to make the journey easy, fast and as natural as possible.

We believe that 2021 will be a year of consolidation of the progress made in 2020. Probably a year to be remembered by each of us.