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What We Know About Consumer Behavior (And Why It Matters)

The always-enigmatic consumer. As the payment landscape shifts in its own enigmatic way, what can be learned by merchants who are concerned with accepting credit cards for their small business? What can we learn about the consumer to enable growth and success?

To a degree, the consumer and their behavior is knowable. Especially when it comes to payment type, we need only look at recent data on payments to peek into what the future holds. Take a 2017 survey by US Bank. Here, we see hints at the average consumer’s relinquishment of cold hard cash for the digital payment options that are on the rise. According to the study, 47% of consumers stated that they would prefer using digital apps to pay, compared to 45% for cash.

While physical cash obviously still holds sway, numbers show it to be receding; that same survey held that 50% of respondents simply don’t carry cash over half the time. Notable, too, is the lesser amount of cash that is held. About half said that they usually carry less than $20 on their persons, and 76% said that they carry less than $50. 5% of respondents said they never use cash. Predictably, the preference for cash matches smaller purchases, namely, less than $50. Naturally, cards are the easier option when compared with lugging around large quantities of cash.

Changing tech

Advancing technology is also changing the payment game. Digital wallets, like Apple Pay and Samsung Pay, have been around for a good while, but the speed and convenience that wearable tech like smartwatches brings to the table means there are fewer and fewer barriers between a consumer’s account and the vendor. Mastercard and Visa announced recently that they’ll be teaming up to offer payment power in fitness trackers. All the advancements mean retailers need to make sure that they are ready.

Lucky for most, terminals are being made de rigueur with NFC (near-field communication) technology included, and so novel applications of the same technology don’t require updates to hardware.

The eCommerce experience

Online, too, there are changes afoot, with new payment processes, especially P2P payments mixing up the landscape. Still, eCommerce is overwhelmingly ruled by the good old-fashioned credit card. The likely reason is the confidence added to the process by the perception of security their branded cards come with. This security is extended to merchants too, who, with the help of their payment gateway, enjoy better security and PCI compliance.

For online consumer behavior, it can be assumed that standard debit transactions are here to stay, although other payment types like ACH transactions have been growing recently.

The underlying suggestion we can glean from the lay of the payment land is that essentially, more is better. Merchants can’t really afford to be exclusive when it comes to accepting credit cards for their small business. Luckily with Moolah, payment processing online or in person couldn’t be easier. With the addition of the versatile Poynt Terminal that we set merchants up with, it’s likely that you’ll be able to roll with any changes in consumer behavior for time to come.