Gift Shop Plus Summer 2021
An Uptick in Digital Payments By Keith Loria

A look at how retailers are using digital payment methods

Although digital payments started to become popular before 2020, once the pandemic hit, this was a must-have option for any retailer doing business online, in-person or both.

In the report, “The State of Retail Payments In 2020,” put out by Forrester Research, senior analyst Lily Varon noted 19% of U.S. adults used a digital payment in store for the first-time ever during the pandemic’s first months. Additionally, 62% of consumers overall utilized a smartphone to make a contactless payment.

Leon Buck, vice president, government relations banking and financial services for the National Retail Federation shared that these numbers are just the tip of the iceberg of what’s happening in 2021, as digital payments have become the norm for many over the last year.

“It’s become a lot more popular,” he said. “We did a survey amongst our retail members a few months into the pandemic and almost 70% said they were now accepting contactless payments and that’s probably closer to 75% now.”

What has really increased, he noted, was the third-party wallet platforms like Apple Pay, Google Pay and some retailers even have their own.


Many customers prefer digital payments because they’re faster, considered more secure, and when COVID first hit, were thought to be safer since they didn’t have to touch money that someone else had touched.

“The main pro is it’s easier and faster; you’re in and out of the store without having to go through a checkout person,” Buck said.

For retailers, using digital payments helps to give the customer more options based on what is convenient for them in the moment.

For example, Pria Maineri, owner of 88kitty, a candle, soap and bath bomb gift store in Los Angeles, noted that offering the ability for customers to use digital payments has been received very positively—first when it was selling in farmer’s markets, and ever since it moved into its retail location in October.

“Customers enjoy the convenience of using digital payments so we love to offer this feature and create a faster checkout,” she said. “Originally, when customers would ask if we accepted digital payments, we used to wince about how we had to say no. Customers would come with cash budgeted for groceries, and see our candles as an indulgence, and thus wouldn’t have any extra cash with them. By offering digital payments, customers could just whip out their cards and still get the items they wanted.”

That allowed the customers to shift focus from payment to enjoying the candles and gifts. Currently, the store is using Paypal Here and Venmo, where customers can scan QR codes that are posted in-store.

“We try to offer as many mainstream digital payment solutions as possible so customers can quickly confirm we do take their preferred method, and then quickly move on to enjoy the shopping experience they came to have,” Maineri said. “I also like the credibility it builds, when customers see the payment forms we accept, it leads to an easy integration into their own shopping habits.”


Digital payments are not perfect, and stores sometimes have to deal with Wi-Fi connectivity problems, outages and delays that come after a purchase is rung up, with some taking a minute or two to say if the transaction actually went through.

“Another issue we have is the various fee structures involved, which can hurt profits because tax is taken out differently for each digital payment solution,” Maineri said. “The fee structures will vary based on the provider, but there is typically a flat transaction fee which can lower if you pass a sales threshold. The major providers are very upfront about their fee structures, but sometimes forget to mention how certain forms of payment can cause larger portions of fees to be deducted.”

For example, when a store enters a card number as opposed to swiping or chipping it, the fee taken will be higher on that manual transaction for most.


Fees are what retailers seem to care about the most and each of the major digital payment providers— PayPal, Apple Pay, Venmo and Zelle—have their own unique structure.

“Every time a retailer uses a credit or debit card, retailers have to pay an interchange fee and a processor fee,” Buck said.

For instance, Venmo charges a 3% fee when a credit card is involved, while Zelle and Apple Pay have a sliding scale based on card used and number of transactions a store has. PayPal, meanwhile, charges a 5.4% commission per transaction, plus .30 if the customer is from another country. But it’s generally considered the most secure by many experts.


For retailers thinking of offering digital payments for the first time, Maineri suggests starting with the well-known providers to quickly build trust and a solid reputation.

“Do not feel as if you must get the best, top of the line POS package/set-up, especially if you are just starting out. Go with the cheapest option and upgrade as you need to,” she said. “Let your customers know you accept these forms of payments. When you receive your setup from a POS supplier, they will usually include promotional material to place around your store. If not, you can print out their logos and post them.”

Equally important, Buck noted a store should update its Google business page, website and social media sites to reflect that it now accepts these new forms of payment and that marketing is done in store.

Keith Loria

A graduate of the University of Miami, Keith Loria is an award-winning journalist who has been writing for major newspapers and magazines for close to 20 years, on topics as diverse as sports, business, theater and retail. He started his career with the Associated Press and has held high editorial positions at Rinkside, BCA Insider and Soap Opera Digest. You can view some of his recent writing at

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