Payments are no longer mere transactions; they play an important role in consumers’ shopping experiences. The pandemic accelerated acceptance of contactless payments, and according to the latest Payments State of the Union survey from Discover® Network, the vast majority (91%) of consumers have adopted digital payments. From mobile wallets to buy-with-one-click buttons for online checkout, consumers are enthusiastically embracing streamlined shopping journeys supported by technology. As new payment technologies advance, consumers’ expectations – from seamless payment experiences to robust fraud protection – are transforming commerce worldwide.
To stay ahead of the curve, merchants are investing in payment solutions that can help them stay competitive, enhance customer loyalty and shape payment innovation for the future. Read on to learn more about consumer trends shaping innovation in the payments space today, and how partnering with forward-looking payment provider networks can help position merchants for success now and in the future.
Adoption of digital wallets is on the rise
The Discover Network survey found that 61% of consumers have used a digital wallet in the past 90 days. According to a recent survey by Velera, 69% of consumers now use mobile wallets, up from 44% in 2021. While more than a third (35%) of consumers prefer to make in-person payments to a business by tapping their card, digital wallets offer consumers ease of use and added security features like tokenization and multi-factor authentication.
In addition, digital wallets can support integrations that automatically apply consumers’ loyalty points and rewards, further fueling their growing preference for digital payments. Looking ahead to the future, digital wallets also have the potential to evolve into comprehensive "super apps" that can be used for purposes beyond payments, from forms of identification to transit passes and more.
Interest in connected commerce is growing
Consumers are also increasingly participating in connected commerce, which integrates payments into connected devices. For example, 86% of consumers are comfortable tapping their card or phone on a merchant’s mobile device in various scenarios, according to the Discover Network survey.
Payment integrations that support connected commerce include embedded payments and headless commerce. Embedded payments enable consumers to complete purchases within a digital platform, website or app. For example, after entering their payment information, a consumer can complete purchases seamlessly within the grocery delivery app on their smartphone or tablet. Headless commerce uses APIs to separate a digital platform’s back-end e-commerce functionality from its front-end, customer-facing interface. This equips merchants with a more flexible, agile and customizable approach to creating a unified shopping experience.
Investing in connected commerce and partnering with a payment network provider that supports these tools offers a variety of potential benefits to merchants, including improved customer satisfaction, increased conversion, new sales and reduced costs. In addition, connected commerce generates a wealth of data that can be used for hyper-personalization, further enhancing the customer experience and driving sales.
Seamless integration of shopping journeys
Alongside connected commerce, merchants are creating omnichannel shopping journeys to integrate consumers’ experiences across devices and channels. Omnichannel payment experiences can enable consumers to shop seamlessly online, in-store and in-app, satisfying their desire for frictionless and secure shopping journeys, whether they’re picking up online orders at the store or having them delivered straight to their doorstep.
Building a seamless cross-channel business model that lets consumers shop whenever and wherever they want can help merchants grow revenue and build loyalty. Merchants need to partner with payment network providers that can provide a variety of digital payment options, simplify transactions, and stay up to date with technology.
Prioritizing protection of personal data
Advances in technology also offer merchants powerful tools in the fight against fraud. For example, artificial intelligence (AI) models can analyze vast amounts of data and detect unusual patterns that may be indicative of fraud in real time, and fraud detection tools that leverage machine learning can adapt to new threats as they emerge.
A robust, multi-pronged approach to fraud prevention – including solutions like Fraud Alerts from Discover Network – can reduce merchants’ exposure to chargebacks, lost inventory, increased operational costs and reputational damage resulting from fraud incidents. Moreover, Enhanced Decisioning and ProtectBuy enable merchants to send additional customer data to issuers as part of the authorization, allowing the issuer to make a more informed decision in real-time to approve or decline a transaction. In addition to supporting smarter fraud detection, Enhanced Decisioning can lead to higher approval rates and reduce consumer friction.
Fraud also remains a top concern for consumers: 76% of respondents to the Discover Network survey said they are willing to undergo more security/verification steps at log in or checkout for additional security when making a purchase.
Fraud protection is especially important in this moment, when phishing scams and other fraud attempts are on the rise and are anticipated to increase alongside real-time transactions. A recent survey by FICO found that one-third of adults in the U.S. have fallen victim to real-time payment scams, and the FTC announced that consumers reported losing more than $12.5 billion to fraud in 2024—a 25% increase from the previous year.
By understanding emerging trends, anticipating consumers' needs and harnessing technology's potential, merchants can create enhanced shopping experiences that exceed evolving consumer expectations. Partnering with payment provider networks that offer the technology and business expertise to support payment innovation is essential to staying competitive in this fast-changing landscape.
To learn more about payment trends, visit Discover Network.
