10 eCommerce Payment Trends You Can’t Afford to Miss

To keep up, banking and financial companies have had to focus on the latest trends in the marketplace to keep up with consumer demand. Turning a blind eye or resting on your laurels is no longer acceptable and will bankrupt your business.

Today we will cover the top ten digital trends you need to monitor and meet head-on to stay relevant and not become obsolete. By keeping up with cutting-edge technology, you can position your business for success now and into the future.

1. Mobile commerce usage is on the rise

Mobile commerce, more commonly known as mcommerce, refers to consumer usage of smartphones and tablets to purchase goods and services over the internet. This subset of ecommerce is steadily growing year after year and will continue to do so for the foreseeable future. The number of smartphone users in 2021 was 6.4 billion, and forecasts predict that number will increase to 7.5 billion by 2024. Retailers and service providers across all industries have continued to make advancements in their digital platforms over the past decade.

Consumers can read product reviews, compare pricing between companies, purchase goods and services, conduct banking transactions and search for discounts and coupons on their mobile devices. Nowadays, consumers expect retailers in every industry to provide an excellent customer experience online. If you're a retailer with a digital presence or an entrepreneur that sells products over the internet, you've undoubtedly seen a steady increase in the usage of mobile devices to make purchase decisions and pay for goods or services.

2. Cross-border payments are increasing

In 2020, COVID-19 contributed to an accelerated shift in cross-border payments. Shutdowns and stay-at-home orders increased the need for digital transfer services allowing several low-cost companies to seize market share from major players such as Moneygram and Western Union. According to a recent study, 83% of P2P payment users stated that family members abroad had an increased need for additional funds to pay for housing, healthcare and food. In the past, cross-border payments were expensive and slow.

Government regulations made the process slow, and cross-border payments took a great deal of time to reach the recipient. But due to the pandemic and current events, the industry is streamlining payment systems to provide faster services and transactions. Technology companies such as Blockchain are now creating transparent ledger systems to track digital payments and usage, and compile data on sales. Blockchain is pushing the industry forward and opening doors for international virtual currency platforms.

3. Artificial intelligence is becoming more advanced

As online payment and technology platforms have expanded, so has the risk of fraud. Consumers expect their digital transactions to take place on a secure system that protects them from identity theft. Artificial intelligence is the technology that gives payment platforms the ability to provide faster and more efficient payment processes, perform digital check processing online, detect fraudulent activities and save money for both the customer and the company.

Enhanced cybersecurity features such as facial recognition, voice recognition, fingerprint scanners and retinal identification reduce the risk of theft exponentially. As payment technology continues to expand and evolve continually, artificial intelligence will be the driving force behind the scenes monitoring customer behavior and payment transactions while reducing the possibility of theft. Companies that use AI will be able to provide a more personalized experience for the customer, make internal processes more efficient and reduce overall costs.

4. Rising consumer demand for seamless payment options

The age of the population is changing here in the United States and around the world. According to a recent study, 79% of the population is 57 years old or younger. That statistic is important because it indicates that the vast majority of people around the globe are tech-savvy. Businesses worldwide must place innovation and technology at the forefront of product development, product offerings and digital payment systems. Consumers expect automated, efficient and cutting-edge technology, and businesses will have to be diligent and aggressive to meet this need.

Forcing customers to fill out paperwork, applications and loan forms won't work as they did in the good old days. Consumers are used to easy-to-use processes that save time. If asked to complete unnecessary tasks, customers will move on to a company that provides a more efficient service. In today's competitive marketplace, businesses will need to stay relevant and eliminate complex structures and barriers to entry to attract new customers.

5. Mobile wallets are becoming more popular

As consumers become more comfortable conducting transactions with their smartphones, mobile wallets are becoming more popular each year. Mobile wallets allow customers to store debit, credit and gift cards digitally within the platform and eliminate the need for physical cards. All the customer needs to do is tap their smart device to the reader, and the transaction is complete. It's a win-win situation for the customer and the merchant. The customer has an easier way to complete transactions, and the merchant can avoid swipe fees from merchant payment providers.

In 2021, 68% of smartphone users said they used mobile wallets in the past year. That number has steadily increased since the pandemic, and experts predict that trend will continue. More and more customers want contactless payment options, and brick-and-mortar stores that don't offer them stand to lose customers over time.

6. API integrations are mandatory for survival

Application programming interfaces (APIs) are what companies use to respond quickly to evolving customer expectations. APIs give companies the ability to personalize experiences on their payment platforms, websites and mobile applications. They are the foundation of next-generation payment platforms and are especially important in the banking and financial services industries. APIs create connections between applications that exchange data, increase productivity and streamline processes.

With the power of APIs, developers can create new features or products very quickly and help companies increase revenue and sales. They no longer need to rely on outdated legacy systems that slow the creative process. API integration has become critical to innovation and is perhaps the most important component businesses need to keep up with changes in the digital landscape.

7. Financial companies are collaborating with FinTech

The collaboration of fintech and financial companies helps attract new customers and provide personalized customer experiences. In previous years, the financial industry believed that fintech companies were a threat and considered them to be competitors. However, that belief has changed over the years, and companies now realize that fintech can provide the necessary technology they don't have access to in-house. By working with fintech, financial companies get access to the payment solutions they need and can offer the customer a wide selection of services.

Customers are using mobile phone applications and cloud computing more than ever before, and it's beneficial for companies to partner together to meet the changes in customer behavior head-on. Digital-only banks, chatbots, person-to-person payment applications and anti-money laundering software are just a few of the different technologies fintech provides to the financial services industry. Collaboration saves financial companies significant amounts of time and money needed to invest in creating these technologies in-house.

8. Subscriptions and recurring payments have major impact

Steady and reliable outcomes have become the focal point of businesses across many industries. Companies have incorporated subscription billing and recurring payments into their platforms to improve relationships with current and future customers. Subscription billing removes the hassle of collecting monthly payments and allows companies to focus on providing better service and more valuable products. Customers get uninterrupted access to services without being concerned about billing dates or having to mail payments early so they won't be past due. Everything is digital, and monthly payments are collected automatically.

Over the past decade, we've seen increases in businesses that offer subscriptions or recurring payments in multiple industries. Businesses have realized that they can attract more customers and lower customer acquisition costs by providing these options. Subscription billing allows companies to predict revenue every month and scale profitability with cross-selling and upselling. Everybody wins with subscription billing, and companies have a much better chance to establish long-term relationships with customers.

9. Buy now pay later options are here to stay

The ‘Buy Now Pay Later’ model has become very popular with consumers and has provided flexible payment options at checkout time. Companies such as Paypal, Clearpay, Laybuy and Klarna offer customers the opportunity to purchase goods in installment payments. Similar to what layaway programs did in the past but with a couple of differences. With BNPL options, customers get the product immediately after the payment transaction is completed and don't have to wait until the balance is paid in full to take ownership. The second benefit is that customers can take advantage of interest-free BNPL options and not have to use a credit card.

In the ecommerce industry, the abandoned cart rate indicates how often consumers change their minds during the checkout process. The average abandonment rate is around 70% throughout the ecommerce industry, and BNPL options reduce that number significantly. According to a recent article, Buy Now Pay Later services will account for $995 billion worldwide by 2026. With numbers like these, it's easy to see why BNPL options have become so popular with businesses and consumers.

10. Online purchases will increase year after year 

Online purchases were steadily increasing in the years before the pandemic. Companies such as Amazon saw exponential growth, and consumers began to purchase an ever-growing array of products. That growth was accelerated tremendously by COVID-19 and the shutdowns. The way consumers choose to buy goods and services has forever changed, and the online shopping landscape will never be the same.

During the pandemic, most companies had to re-evaluate their strategies and develop an effective online presence to survive and keep their doors open. In 2020 alone, online shopping increased by 74%, and the businesses whose ecommerce platforms were online and ready to go were able to capitalize. Industries across the board have learned that they need to have a digital presence to remain competitive. Businesses that don't develop ecommerce platforms will be at a disadvantage and can expect to be far less competitive in the marketplace.

Take what you’ve learned today and implement it into your future strategies. You'll position yourself to be successful and enable your business to handle the ever-changing landscape of the ecommerce industry.