By Jeremy Nicholds, CEO at Judopay

No industry completely escaped the challenges of 2020. For some it meant adapting to a new way of working, but most businesses needed to continually embrace change, to survive. The coming year will no doubt be transformative also, as we get back on our feet, try and recover from the year just gone and adapt to our new normal.

Unsurprisingly, given how central they are to our day to day lives, payments play a key role. The way we have interacted with each other has been paramount in stemming the spread of the virus; how we buy our groceries, how we pay for transport, even down to which payment method we’re choosing to use.

Businesses significantly reduced the use of cash last year as well as the number of “touch points” at the point of sale in order to reduce contagion risk.

Contactless became an essential component of the shopping experience in 2020. Indeed Visa’s 2020 annual report shows that contactless transactions now account for 65% of all face-to-face transactions outside of the US, which is still catching up with other parts of the world.

The limit for card based contactless payments was raised from £30 to £45 in April and now looks set to rise further. This helped the uptake, including by those consumers who previously were not using the method.

But contactless is not the only “touch free” payment method, and as we get further into 2021, and there is a continuing need to maintain social distancing measures, we are likely to see new, innovative solutions gain further ground.

The growth of app-based commerce in 2021

Apps have a huge role to play for many sectors – enabling businesses to engage with their customers in a better way and improve the buying experience. One app feature that became particularly important for the hospitality industry last year was ‘pay at table’ functionality.  Done well, this offered an easy way to maintain social distancing whilst making it more convenient for customers to pay and make repeat purchases. Apps offered another key benefit over cash and card payments – in terms of identifying and communicating with customers who may be at risk if an outbreak of COVID-19 occurred at a venue.

This widespread adoption of apps will continue to spur on the growth of app-based commerce in 2021. As we continue to adapt and recover from the impact of the pandemic, apps will continue to play a vital role in reducing unnecessary contact during the checkout process.

Contactless payments need to go one step further

Contactless has paved the way for safer and more hygienic payments in public. They mitigate the need for customers to physically touch anything other than their own card, but they are still required to get close enough to the payment terminal for the transaction to be completed. And this usually means there is a member of staff nearby. For example, some restaurants or pubs bring the payment terminal to the table, but payments made this way are taking place at a distance much closer than the two metres recommended by the government.

The next logical step is to make payments really touch free, allowing customers to complete their transaction at a safe distance. We will likely see this technology, already available in the market, taking off in 2021. Such a solution enables a staff member to display a QR code on their own tablet or smartphone which is then scanned by the customer using their own phone, instigating the payment. This helps not only the nation’s small and medium sized enterprises (SMEs), get back on their feet following previous and current lockdowns, but the whole country.

What will be required of the payments industry in 2021?

Many customers are likely to continue shopping from home rather than venturing out into the public. 2020 forced them to adapt to the latest technologies available to them, and they are now comfortable with ecommerce being a staple point of their retail experience. So, solution providers should ensure that payment methods are transferable into the digital sphere.

Having been hit hard during lockdowns, SMEs want to get back on their feet as quickly and efficiently as possible. This will drive the need for solutions that will support them in doing this by removing any complications associated with using multiple payments providers.

At the same time, having faced downturns in revenue and unreliable cash flows, it is unlikely that SMEs will be looking to take on high fees associated with setting up payment terminals or integrating costly hardware into their business structures. Providers need to offer cost-effective solutions that democratise payments. So not only enterprise businesses have access to the latest technology, but SMEs can benefit from it too.

If payments providers can offer all of this, they will be contributing to the recovery plans of businesses as they emerge from lockdowns.

A new year and a new normal

With the vaccinations continuing apace, lockdowns coming to an end and physical stores reopening for business, this year looks to be a promising one. We expect that it will also be an interesting one for the payments industry, which has an important job ahead of it – assisting SMEs and the wider economy in their COVID-19 recovery plans.

Like many big events in history, and due to our adaptable nature, it is likely that we will see some exciting new solutions being born from the changes that take place over the next 12 months.