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Evolution of Payment Methods
May 3, 2024

The Evolution of Payment Methods in Furniture Retail

Imagine walking into a furniture store, your eyes gleaming at the array of elegant sofas, luxurious beds, and stylish dining sets. As you make your selection, the cashier smiles and asks, “How would you like to pay?” Your options? Traditional cash or card? Or perhaps you prefer the convenience of mobile payments or the flexibility of buy now, pay later (BNPL) plans?  

The evolution of payment methods in furniture retail has transformed the way we shop, offering convenience, security, and flexibility like never before. From the early days of bartering to the rise of digital wallets, the landscape of payment methods has undergone a dramatic shift.  

Today, furniture retailers are embracing a range of payment solutions to cater to the diverse needs of their customers. The advent of the internet and e-commerce platforms in the late 1990s and early 2000s further revolutionized how furniture was sold. The integration of online payment gateways became a focal point, addressing the dual challenges of security and accessibility. With online sales, furniture retailers could reach a broader market, transcending geographical limitations and tapping into a more extensive customer base. 

Security challenges were met with innovative solutions, including advanced encryption protocols and secure socket layers (SSL), ensuring that consumer financial data remained protected. Over the last two decades, statistics have shown a steady growth in online furniture sales, reflecting consumer confidence in digital transaction systems and the convenience they offer. 

Having said that, let’s dive into the fascinating world of payment methods in furniture retail, exploring the journey from traditional to modern, and why choosing the right payment solutions is crucial for success. 

Traditional Methods: Embracing Change from Cash Registers to Credit Cards 

Think back to a time when cash was the primary mode of payment, and every purchase involved handing over physical currency. Cash registers were the backbone of retail operations, streamlining transactions and ensuring accuracy. However, with the introduction of credit cards in the mid-20th century, a new era of convenience emerged. 

According to the McKinsey’s Global Payments Report, cash payments declined by 4% in 2022 alone. Similarly, cash usage has declined by 20% over the last five years, highlighting the shift towards digital payments. On the other hand, electronic payments nearly tripled the overall growth in payments revenue in the last five years. 

The advent of credit and debit cards revolutionized the way we pay for furniture and services. With the swipe or tap of a card, customers could instantly complete transactions, making it convenient and efficient. Today, credit card transactions dominate the furniture retail landscape, providing consumers with a convenient and reliable payment option. 

In 2022, credit cards accounted for 31% of all payments, as per a study conducted by the Federal Reserve Bank of San Francisco. This marks the highest level since the study’s inception in 2016, suggesting that credit cards are increasingly preferred over cash or other payment methods.  

Households with higher incomes tend to use credit cards for a larger percentage of their payments. For example, it rises to 37% for households earning between $100,000 and $149,999, and it reaches 50% for those earning over $150,000. 

With the convenience of deferred payments and the security of fraud protection, credit cards transformed the way consumers shop for furniture, ushering in an era of digital transactions. 

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The Digital Revolution: Mobile Payments and Contactless Technology 

Fast forward to the digital age, where smartphones have become an indispensable part of our daily lives. Mobile payments have taken center stage, allowing you to make purchases with just a tap or scan of your phone. With platforms like Apple Pay and Google Pay, you can leave your wallet at home and enjoy a seamless checkout experience. 

In fact, studies indicate that mobile payments are projected to grow from $3.84 trillion in 2024 to $27.81 trillion by 2032, at CAGR of 28.1%, indicating the growing popularity of this payment method. Mobile payments offer enhanced security features, such as tokenization and biometric authentication, making them a popular choice among furniture consumers. Today, mobile payments account for approximately 20% of all transactions in the furniture retail sector, a number that is expected to rise in the coming years. 

In response to the global pandemic, contactless payments have surged in popularity, offering a hygienic alternative to traditional payment methods. Whether it’s a quick tap of your card or a scan of a QR code, contactless technology provides a safe and convenient way to pay. 

According to a study by Mastercard, 79% of consumers worldwide now prefer contactless payments, citing speed, convenience, and hygiene as key factors driving adoption. In a post-pandemic world where hygiene and safety are paramount, contactless payments have emerged as the gold standard for touch-free transactions. 

The integration of IoT and connected devices promises to further transform how payments are processed in physical stores, making them smarter and more consumer friendly. 

Innovative payment methods are being piloted globally, signaling a shift towards a more integrated, technology-driven consumer experience in the furniture retail sector. These advancements not only promise enhanced security and efficiency but also a deeper, more interactive shopping experience. 

The Rise of Flexibility: Exploring Buy Now, Pay Later (BNPL) and Installment Plans 

One of the most significant innovations in payment methods is the advent of Buy Now, Pay Later (BNPL) services. These services allow customers to purchase furniture and pay for it in installments over time, often with zero or low-interest rates.  Buy Now, Pay Later (BNPL) options like Klarna and Afterpay allow you to spread the cost of your purchase over time, without accruing interest. It’s a win-win for both consumers and retailers, offering greater affordability and driving higher conversion rates. 

BNPL has also gained immense popularity among millennials and Gen Z consumers, who value flexibility and convenience in their shopping experience. Recent studies show that BNPL transactions in the retail sector have grown by over 150% in the last five years, indicating a significant shift in consumer behavior. 

According to data from eMarketer, BNPL transaction volume in the United States alone is projected to reach $680 billion by 2025, fueled by the appeal of interest-free installment plans and transparent repayment terms. By offering consumers the freedom to pay for purchases in manageable increments, furniture retailers can drive higher conversion rates and foster long-term customer loyalty. 

Meanwhile, installment plans have stood the test of time as a reliable payment option for budget-conscious shoppers. According to a survey by Accenture, 61% of consumers worldwide have used installment plans to finance purchases, citing flexibility and affordability as key drivers of adoption. By dividing the purchase into manageable monthly payments, retailers can offer their customers a way to furnish their home without breaking the bank. 

Choosing the Right Payment Solutions Partner 

When choosing a payment solutions provider for your furniture store, it’s crucial to find one that aligns with your customers’ expectations and understands the specifics of your industry.  

Here are some key features and services to consider: 

  • 24/7 Availability: It’s essential that your payment solutions provider is available at all times. If your payment system experiences downtime, it could mean lost sales. Opt for a provider that offers round-the-clock service, ensuring you can get support and answers to your questions at any hour. 
  • Responsive Customer Support: High availability is important, but the actual accessibility and responsiveness of the service team are equally crucial. Don’t rely solely on the sales team’s promises; instead, read reviews to gauge how effective the technical support really is. 
  • Compliance with Standards: A good payment solutions provider will assist you in achieving and maintaining compliance with PCI Security Standards. This is now a mandatory requirement for small businesses, and your provider should help simplify this process for you. 

When it comes to selecting an account, you have numerous options. You could choose a well-known brand that invests heavily in advertising, or you might prefer a company with a solid history of supporting furniture businesses like yours. 

Why Choose TechBlocks for Next-Gen Payment Solutions? 

Now that we’ve embarked on this exhilarating journey through the evolution of payment methods in furniture retail, you might be wondering – why TechBlocks?  

As a leading firm in cloud and digital product engineering, TechBlocks is at the forefront of innovation, offering cutting-edge payment solutions tailored to the needs of furniture retailers. 

With our comprehensive range of services in e-commerce and digital commerce, supported by a global network of over 2,500 professionals, TechBlocks is your strategic partner in navigating the evolving landscape of payments. Our expertise in modern web technologies, including Angular, Node, React, and .NET Core, ensures seamless integration and optimal performance, while our commitment to innovation drives transformative growth for your furniture business. 

But don’t just take our word for it – explore CrediLink, our flagship payment solution designed to empower furniture retailers with frictionless payment experiences. From secure checkout processes to personalized payment plans, CrediLink harnesses the power of technology to enhance customer satisfaction and drive revenue growth. 

As the furniture retail industry continues to embrace innovation and adapt to changing consumer preferences, the evolution of payment methods serves as a testament to the power of technology in shaping the future of commerce. Staying competitive requires not only meeting but anticipating consumer expectations, which are increasingly oriented towards convenience, speed, and security. And with TechBlocks by your side, the possibilities are endless. 

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So, what are you waiting for? Join us on this journey toward a seamless, futuristic payment landscape, where convenience meets innovation, and shopping becomes an experience like never before. 

Contact us today, and together, let’s unlock the potential of tomorrow—one transaction at a time!