Remote commerce has exploded in the last couple of years, driven by the pandemic. Through multiple lockdowns, ecommerce was pretty much all we had, whether we shopped on our laptops or phones.
Aligned with this, new technologies emerged to boost ecommerce and broaden convenient payment methods.
These trends have been supported by the Payment Services Directive (PSD2), which has been around since 2019, and aims to increase payment security, increase competition, and improve consumer protection.
The customer at the center
Over the next few years, ecommerce is going to continue to grow at speed, with implications such as growing emphasis on customer loyalty, which is going to play a more decisive role in commerce.
In order to achieve higher levels of engagement, retailers will have to mold their operations according to market trends. These include the following:
Having several payment methods offers a number of advantages, such as higher sales conversion, customer loyalty and increased repeat purchases. In addition, they must also make sure that they have certain characteristics, which include:
a) user-friendliness and transaction security,
b) flexibility to allow customers to have more control over how they pay by extending traditional payment methods with emerging methods such as digital wallets,
c) the ability to pay via bank account, as it’s increasingly common to offer payment initiation services. In one study, by 2030, payments from bank transfer in Europe are going to account for 60% of total ecommerce sales,
d) the ability to provide real-time responses. Different institutions are promoting the use of instant payments not only because of the clear advantages including speed and availability, but also their ability to support increasingly innovative business models.
More and more consumers are demanding the ability to shop and pay wherever and whenever they want: having the flexibility to purchase and return items across multiple channels means that retailers need to become a truly unified business by putting customers at the center of their strategy.
Customers can tap into the advantages of unlimited offerings of online marketplaces in addition to broader payment method availability. More importantly, putting your brand on a marketplace is the quickest and easiest way to do business online.
When it comes to remote payment user experience, SCA (Strong Customer Authentication) has provided a safer experience. Despite this, it has caused a bit more friction in terms of the payment process and as a result, conversion rates have taken a bit of a hit.
As such, in the coming years, businesses will need to discover a balance between security and customer experience in order to optimize their conversion rates. And critical to this will be the support that is provided by payment service providers.
Buy now pay later
Buy now pay later strategies let consumers spread out their payments without the worry of incurring additional costs. According to one study, buy now pay later payments are expected to represent almost 10% of ecommerce by 2023.
The payments ecosystem is changing day by day, and digitization has accelerated change. More and more businesses are offering innovative and more secure payment solutions. While at the same time, there is a clear shift in consumer preferences and expectations. And we’ll continue to witness substantial changes in the next few years anchored to developing new trends.
PS: ArganoUV is one of the world’s leading digital products & experiences development & strategy teams. Contact us to see how we can work together.