From Starbucks to Small Businesses: How the Way Consumers Pay is Changing

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Embracing the digital economy has become a key issue for many retailers in recent months, which is why it was welcome to see Shopify join forces with the Government of Canada to create an initiative designed to help them on that journey.

However, while going digital is of course vital, there are also other matters that need to be on a retailer’s agenda at present – with payments being a crucial topic. The way that consumers pay for many things has been transformed in the last few years and there are clear signs that brands of all sizes are having to move with the times.

New ways to get rewards

The issue of payments has been put in the spotlight by a recent announcement from the coffee giant Starbucks. The company has confirmed that, from the fall, it is set to give its Starbucks Rewards members in the US and Canada the chance to pay and earn stars in many different ways.

In a press release, the brand detailed how members will be able to scan their app and then pay however they like to earn stars, which can then be put towards free items. This will be in addition to the existing option which allows consumers to earn stars by using a Starbucks Card in-store or within the app. As an infographic on the Starbucks site details, this means that customers will earn stars when they use cash, debit cards, credit cards and even selected mobile wallets at one of the chain’s outlets.

News of the move is intriguing, as it could be argued that it highlights two important things – how many of us want more options in terms of how we pay and how we are also embracing alternative forms of payment like mobile wallets. The days of physical dollars appear to be coming to an end, with a recent survey revealing how even small businesses are seemingly embracing different ways to pay.

Going cashless?

New data released this month by the Canadian Federation of Independent Business (CFIB) has revealed that one in three small firm owners have been increasing their use of credit cards and Interac e-transfer for making and receiving payments. The research, which was taken from the organization’s Small Business Recovery Dashboard, also found that one in four are increasing their use of debit cards at the moment.

However, perhaps the most eye-catching statistics related to the use of cash, with the survey finding that 38 percent of small businesses have reduced their reliance on physical money in recent months. Remarkably, seven percent even stated that they had stopped using cash completely.

Corinne Pohlmann, senior vice-president at CFIB, said the study – which was released as part of the organization’s #SmallBusinessEveryDay campaign – highlighted there has been a “shift” in payment methods.

Source: Pexels

A worldwide trend

Seeing such trends play out in Canada is clearly fascinating, but there is a strong argument to say that the country is only reflecting wider developments that are also taking place in many other parts of the world.

In the middle of June, MasterCard released a study based on the responses of adults based in countries as wide-ranging as Australia, Brazil, India, Russia and the UK. It found that around half of those polled expect that they will use cash less in the coming months, while seven in ten consumers added that their recent switch to more digital forms of payment could be permanent.

Furthermore, it could be argued that businesses that are only just making the move away from cash are essentially playing catch-up, compared with some areas. For example, the worlds of IT and gaming have been open to alternative payment methods for some time now, with Microsoft detailing on its site how it allows customers to use the cryptocurrency Bitcoin to add money to their accounts. The online casino industry has been one step ahead on embracing new payment methods too, with this guide to online casinos in Canada explaining how many brands accept the likes of iDebit and INSTADebit alongside e-wallets such as Neteller, Skrill and PayPal. The latter is accepted in many other sectors as well, with the official PayPal website detailing how you can use it to buy goods online from the likes of Best Buy, Walmart and Wayfair. Other merchant partners include Bed Bath & Beyond and Expedia.

A period of significant change

It seems like there is plenty of evidence out there at the moment that the world of payments is in the middle of a significant period of change.

Retailers may have a whole host of matters to think about at present, but it seems vital that this issue remains firmly on their radar in the coming months. After all, failing to provide consumers with their chosen payment methods could result in lost sales and may ultimately go on to have significant consequences.