eCommerce Payment Trends
While the COVID-19 pandemic knocked down many businesses, it sped up eCommerce growth as customers began buying more and more products from their computers and mobile devices.
Today’s customers are looking for easy ways to shop — from the moment they click a website to the moment the product reaches their doorstep. From start to finish, convenience is the key. So convenient, modern payment options are crucial to the success of online orders.
If you run an eCommerce business, here are some eCommerce payment trends to keep in mind in 2022.
On a steady rise: mobile commerce
As we keep tabs on which trends have truly stuck in the eCommerce world, one thing is certain — mobile commerce is taking over. This refers to transactions that customers place through a mobile device. In fact, customers place more than 72% of eCommerce sales through a mobile device.
With online purchases and American customers’ general screen time on a consistent rise, eCommerce businesses must take advantage of the mobile platform.
Ideally, eCommerce businesses have a separate app. If they don’t, they must have a mobile-friendly website design that allows customers to get the best experience when purchasing from an eCommerce store.
Frictionless payment experience
COVID-19 has given the frictionless payment experience a push, and this trend isn’t going anywhere. “Frictionless payments” refers to transactions that use digital payment options, such as digital wallets, in-app payments, one-click payments, and subscriptions. Furthermore, businesses used frictionless payments to process $3.9 trillion globally in 2020, and reports predict growth to $8 trillion by 2024.
Customers favor this payment form because it saves time and simplifies the purchasing process. Frictionless payments also benefit eCommerce brands because the streamlined method reduces customer churn and cart abandonment rates.
Most importantly, this digitized process gives eCommerce brands valuable customer data.
1. Buy now, pay later (BNPL)
The BNPL concept is becoming more popular in the eCommerce world because customers simply don’t want to wait to buy expensive products. This payment model allows eager customers to make purchases immediately by making smaller, interest-free payments over a given period.
As bank account and digital wallet integrations advance, analysts predict the BNPL model will skyrocket in popularity. BNPL is still fairly new, but there’s already been a 197% rise in BNPL purchases in 2020 compared to 2019. Thus far, this method has become especially popular in the clothing industry.
BNPL is just one of many other real-time payment methods that allow customers to move funds instantly. While customers clearly benefit, the whole eCommerce world benefits as well.
Because eCommerce employers have quicker access to inflowing cash, they can pay employees faster, allowing them — potential customers — to have more money to spend on online purchases.
The cryptocurrency journey has always been uncertain. However, big brands like Tesla and PayPal have begun accepting cryptocurrency as a form of payment. As a result, analysts expect more and more eCommerce businesses to soon follow their lead.
Cryptocurrency has unique benefits: low transaction fees, quick processing, easy international payment processing, user anonymity, and more. People without bank accounts can even use cryptocurrency, which allows eCommerce brands to reach more potential customers.
3. One-click payments: Tokenization
Tokenization is a process that allows the exchange of valuable data for nonsensitive data. Businesses can use each piece of sensitive data, or token, across different databases safely and securely.
In eCommerce, brands use these tokens to replace account or card numbers. When a customer purchases their first item from a store, a payment system encrypts their data onto a token.
During all following purchases, the payment system automatically fills in customer payment data. As a result, customers can make a one-click purchase from a website if they’ve gone through the process before.
Tokens not only streamline the payment process but also handle payments securely. Hackers can’t decrypt tokens. So this technology protects customers by allowing them to automatically make purchases without providing direct access to credit card information every time they buy.
It also saves customers time and effort, which helps eCommerce businesses by lowering the cart abandonment rate.
4. Digital wallets and contactless cards
Although different forms of payment are available for eCommerce, cards are still the dominant payment method in the US. Of all eCommerce transactions, businesses fulfill 47% through credit and debit cards.
The familiarity of cards has allowed digital wallets to easily enter the game. A digital wallet securely stores payment information and lets customers pay using mobile devices rather than physical cards.
Digital wallets have a promising future. Customers who have grown up with smartphones and the internet are highly comfortable using this payment method. With about one-third of the US population under the age of 24, eCommerce businesses must adapt to serve their preferences.
Reports have already shown the domino effect. More and more eCommerce businesses say they’ll likely accept digital wallet payments within the next year.
Contactless cards are also gaining popularity in the US. For example, big brands like Mastercard and Visa now offer their customers contactless credit cards.
Future of eCommerce payments
From BNPL to cryptocurrency, today’s eCommerce payment trends point to the promising future of online shopping. New technologies now help both eCommerce customers and businesses by streamlining cash flow. Payment is more efficient, varied, and secure than ever before.
And remember, most of these trends apply to mobile devices!
How Airwallex can help
Our platform works with 11 different currencies while maintaining market-beating foreign exchange rates. We also offer Borderless Cards and end-to-end expense management to help you gain real-time spending visibility.
If you’re ready to get started, sign up for an account today.
Leanna Chraghchian holds a degree in Business Administration from UC Berkeley and is currently working to complete Berkeley's Fifth Year Master of Information and Data Science program. Leanna loves the world of marketing, with great interest in the role data plays to help businesses advance. When away from the laptop, you can find Leanna on the basketball court or at the beach!
Supercharge your eCommerce capabilities with free access to Merch...
10 signs your finance team is going through global expansion