The world of payments has completely transformed in the last decade. Gone are the days when a business’s priority was accepting payments digitally. Businesses selling online in today’s ecommerce environment, especially in the highly competitive retail landscape, should display a certain level of maturity when it comes to how they approach their payment strategy.
This maturity is largely reflective of the fact that the payments world is increasingly complex and fragmented, which can pose a challenge – especially to businesses operating across a multitude of jurisdictions globally. To be successful, a company’s payment needs often require a customised solution built to help them accelerate business revenues.
In online retail, particularly for complex models like marketplaces, the payment provider role has evolved from service provider to strategic partner, helping retailers drive customisation, improve conversion, and optimise performance.
As more businesses will be looking to turn their payment strategy into a revenue accelerator in 2023, lowering processing costs and boosting revenue are quickly becoming key themes. But here are five payment trends to watch in the coming year:
Embedded financial services, while not new, will become more widely available across multiple consumer touchpoints. Examples could include a travel operator providing insurance or a retail business offering branded credit cards. 88% percent of companies that implement embedded finance report increased engagement, and 85% say that it helps them acquire new customers.
We expect to see more around this trend in the retail space either through branded or pre-paid cards or diversified revenue streams with iBanking.
Globally, over 70 billion transactions were conducted via an instant payment system in 2020, and this figure is predicted to reach 199 billion by 2024.
This growth is being driven predominantly by two factors: greater connectivity to the RTP network and a growing preference for direct bank transfers by consumers and businesses generally. So, we’re preparing to see more retail businesses consider the integration of Online Bank Transfers into their payment strategies.
The global payment landscape is increasingly local in terms of preferred methods, currencies, and regulations. If a customers’ card transactions are declined, offering more methods can avoid losing the sale.
According to Visa, payment instalments represented a USD 1.6 trillion market value in 2020 and are up 5% year on year. In contrast, credit card expenditure declined by 4% globally.
Other research indicates that 6% of consumers abandon carts because of a lack of payment options, while 18% give up because of price. Instalment payments boost conversion rates as well as improve repeat sales, accelerating a company’s revenue.
While BNPL options like Klarna already exist around the world, traditional card schemes like Visa will soon allow consumers to choose instalment payments at some of the largest retailers, including Simons, Canada Computers, Soft Moc, and Trévi in Canada.
It’s been proven, time and time again, that strategic payments can accelerate business revenue. As mentioned in the previous question, we expect to see many businesses adopt the latest payment trends like one-click mobile payments, embedded finance, and online bank transfers to reduce costs, improve conversion and boost revenue.
Another way in which retail businesses can simplify and streamline their payment strategy is through implementing Payment Orchestration. Adopting Payment Orchestration through one holistic payment partner gives online sellers more control over their entire payment ecosystem. Removing the complexity of juggling multiple providers, lowers fees, improves visibility, and unifies data streams.
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