One of the more significant barriers that online sellers initially had to work through many years ago was the matter of accepting payments. When ecommerce was relatively new, many consumers were apprehensive about providing their personal financial data online.
Over the years, online payment processing solutions have become increasingly secure. They’re also faster and easier for consumers to use from a wide range of connected devices.
With the percentage of retail sales online growing, the impact of innovations in ecommerce payments has been irrefutably substantial. However, there’s still ample room to improve.
Both ecommerce businesses and online consumers are benefiting from developing trends for ecommerce payments. In order to make savvy decisions related to your store’s operations and growth, you need to stay on top of the latest developments.
Here are some of the noteworthy trends that are likely to affect the global future of ecommerce and how online stores manage payments for 2021 and beyond!
1. Multi-channel selling
One of the perceived benefits of online shopping to consumers is convenience. Today’s consumers often prefer to shop from their laptop or smartphone rather than to waste time hunting down the perfect item in a local store.
This convenience is boosted to a new level through multi-channel selling. Multi-channel selling essentially means that your business is offering goods and executing transactions through various platforms rather than only through the website.
Some of the common platforms used for multi-channel selling are Facebook, Instagram, Etsy, Amazon, and eBay. From a business perspective, multi-channel selling enables you to potentially expand your reach to new customers while managing expenses.
At the same time, you’re connecting with customers on their preferred platforms as a convenience to them.
Keep in mind that some consumers don’t finalize their purchase in one sitting. They may start their purchase on their desktop computer and complete it on their smartphone or even through a store’s mobile app.
When possible, your online store should be connected across multiple platforms or channels to ensure a seamless shopping experience.
2. Increase in mobile payments
Do you have a firm understanding about where and how your customers are making their purchases?
Statista reports that 72.9% of all retail ecommerce is expected to be generated via mobile devices in 2021. This number is only expected to grow, so your store should be positioned to deliver an excellent experience through mobile apps and browsers.
There are a few reasons why mobile commerce is becoming increasingly popular. For instance, consumers have grown more confident in the security of online transactions.
This is particularly true when the transactions are with known and trusted businesses. Security badges on shopping cart pages can help instill confidence in online consumers.
Another reason for increased mobile transactions is that websites and apps have streamlined checkout processes that are easy to complete on a device with a small screen.
In addition, there are advanced ecommerce payment gateway options available that allow for more payment methods and make the processes safer, faster, and easier from any device.
For example, consumers may only need to log in to their PayPal accounts to make payments and complete mobile purchases rather than manually input credit card information.
3. Smarter online payment processing
While consumers appreciate having their choice of payment options, businesses are increasingly stressed by the number of payment methods that they must manage.
Besides accepting a range of credit cards, today’s online stores may also accept payments through PayPal, Google Pay, Apple Pay, and other formats.
To simplify this issue, ecommerce websites have had to find effective ways to manage all of the payment technologies and gateways that their customers prefer to use. One solution that works well for some online stores is the use of an all-in-one payment processor.
The company essentially sets up service with a single processor, and that processor manages all the payment gateways and technologies on behalf of the business.
4. Focus on data privacy
With the growing number of ecommerce transactions, data privacy and online security are increasingly important. Cybercriminals are constantly fine-tuning their efforts, and this means that ecommerce businesses must be at the top of their game in this area at all times.
If you haven’t reviewed your website’s compliance with data privacy standards and the Payment Card Industry Data Security Standard (PCI DSS), now’s the time to do so.
General Data Protection Privacy Act (GDPPA)
The General Data Protection Privacy Act has been in effect across the European Union since 2018. It establishes minimum requirements for transferring sensitive data within the EU and abroad.
Second Payment Services Directive (PSD2)
The PSD2 has set up standardized regulations for payment and data security throughout the European Union and in other countries in the region.
Under this directive, all providers who process payments for consumers in the region must remain in compliance with the established standards.
California Consumer Privacy Act (CCPA)
This is a new regulation that started impacting Californians in 2020. It offers some of the same protections as the GDPPA. For example, it gives consumers the right to prevent the sale of their personal information and to know when their data is being obtained.
These are only a few of the many regulations that affect ecommerce. Staying updated about new and changing regulations is a heavy burden for some ecommerce businesses. All-in-one payment processors are assuming this responsibility in the services that they provide.
5. More businesses using a subscription model
Subscriptions have traditionally been used to meet a consumer’s recurring need for the same service or item. Ecommerce businesses are now incorporating subscriptions into their business models more frequently.
The actual subscription model will vary based on the business’s offerings and customer base. However, subscriptions enable companies to maintain flexible offerings to meet their customers’ needs and budgets.
Subscriptions offer profound benefits to businesses as well. The nature of the traditional ecommerce business model requires companies to maintain a solid stream of online traffic to maintain steady revenue.
Furthermore, the store must have a healthy number of loyal customers, a high conversion rate, or a balance of both. Through subscriptions, companies are able to maintain revenue even when online traffic slows.
Technology has facilitated the growing popularity of subscriptions in ecommerce. Some payment processors have specific features that support managing and collecting subscription payments. This takes a heavy burden off of ecommerce businesses and boosts the benefits of subscriptions.
6. Increase in cross-border shopping
Many of the challenges associated with serving customers across international borders are overcome through modern technologies and services. To sell products in another country successfully, businesses previously had to make currency conversions.
In addition, there was a need to monitor and comply with taxation regulations. While these requirements remain in place, they can be addressed without hassle by modern ecommerce businesses through online payment processors and gateways.
The ability to expand your store’s reach across borders can have a profound impact on your bottom line. Consider that, according to Statista, cross-border shopping is expected to cover as much as 22% of all ecommerce business by 2022.
Ecommerce payment platforms handle the conversions and tax compliance on your behalf so that you can reap the benefits without the hassle.
7. Automated customer service
As your internet venture develops, you can expect to struggle with various growing pains. A common challenge relates to providing consistently excellent customer service while keeping related expenses in check. Artificial intelligence (AI) is increasingly being used for this purpose.
One of the ways that AI is being incorporated into the customer service side of ecommerce businesses is through chatbots. An AI assistant can be available to provide routine services to customers throughout the shopping process as needed.
These chatbots may also assist with questions about orders, refunds, and other related issues. When an AI’s capabilities are reached, the customer’s issue may escalate to a live customer service agent.
How important is it for your ecommerce business to focus on customer service throughout all stages of the buying cycle?
Remember that it only takes one bad experience to drive a customer away forever. Customers must feel respected and supported at all times, and AI in customer service enables you to provide a higher level of support more consistently.
Monitoring trends in ecommerce payments and other aspects of digital technology is essential, regardless of your niche or market. When you understand the latest resources, services, and technologies in use today, you can more strategically position your business to take advantage of them.
At the same time, you can remain attuned to customer expectations and concerns so that you can provide consistently great service to your customers. Now that you understand what the developing trends in ecommerce payments are, you can identify areas where your business has room to improve!