Few markets in the US present as promising a cash cow as retail. With an estimated value of $4.55 trillion—and growing more than 3% annually—the sector is potentially lucrative, but also volatile. With consumer demand that fluctuates according to macro trends as well as taste, retail-oriented fintechs have to be particularly savvy in building out moats and establishing resilient fundamentals.

Biometrics

New technologies are one gateway to securing those goals. Biometric payments, most notably, have become of rising interest to payments providers and retailers. As a form of authentication that’s virtually impossible to mimic fraudulently, the technology offers a path to reducing leakages from crime and thus mitigating costs.

However, biometrics have serious consumer-side questions to address and overcome. Buyers continue to express concerns about the collection, storage, and potential sale of biometric information. Biometric-payment fintechs and partner businesses using these solutions must market the privacy and security components of their products in order for the technology to scale.

BNPL

While the BNPL space has seen waning interest from VCs since its previous peak, it still saw more than $140 billion processed in 2021, and is expected to grow more than 33.3% per year. That expansiveness explains the insistence of players like PayPal that BNPL continues to present a promising product for retail payments.

Though underappreciated, BNPL’s relationship to credit-reporting bureaus may have a significant effect on payments volumes. On the one hand, delinquent payments may negatively affect credit scores, which may dissuade some consumers from making payments through BNPL products. But on the other hand, BNPL can become a gateway to improved credit scores through on-time payments of relatively small purchases. If they do become regulated and enter the credit systems, BNPL players will emphasize the latter opportunity in their marketing strategies.

PoS solutions

Grab coffee almost anywhere in the US and you’re destined to encounter a Point of Sale (PoS) solution by Toast or Square. But go next door to a mom-and-pop store and you may find far more antiquated equipment and payment methods. Though relatively established, PoS solutions still have a massive market to expand into, bringing both modern payments products as well as the integrations to automate necessary functions like accounting and revenue projection.

After a pandemic-induced dip, PoS sales are rebounding significantly, with a CAGR of more than 15% by 2029. We should expect PoS-related payments startups to emphasize the resilience of their solutions to retailers, as well as their cost-effectiveness and ability to automate other business processes.