Recent research by Worldpay shows a continuing upward trend for cashless transactions and the use of alternative payment methods.
With demand for online transactions growing around the world, the number and variety of online payment method options continues to increase.
According to Worldpay’s 2021 Global Payments Report, local payment methods such as bank transfers, e-wallets, cash-based payments, and other alternatives to conventional payments are projected to grow from 65% to over 72% of global payments by 2023.
The shift in global and local payment preferences is pushing both sides of the e-commerce world – consumers as well as online merchants – to adjust their preferences. Merchants must tailor their offering and technology to meet the demands of each of their local markets. At the same time, consumers are increasingly turning to new alternative payment methods, providing more payment options than ever before both on- and offline.
To offer the best experience and ensure the highest possible conversions, merchants are under an increasing amount of pressure to provide consumers with a variety of online payment method options that are popular and recognizable in each local market.
The changing sphere has changed the customer landscape and has positioned customers in an advantageous position. During the pandemic, more than one-fifth of global retailers have adapted to the changing consumer landscape during the pandemic by either building e-commerce sites or starting to accept contactless transactions. The initial catalyst for this transformation was primarily the lack of alternatives (with in-store retail being closed for extended periods), but many changes in online purchasing behavior have caught on in a way that looks like it’s here to stay.
Consumers’ growing adoption of alternative payment methods also indicates that they expect retailers to offer more shopping and payment options — and that they might take their business elsewhere if this is not provided. 79% of consumers prefer to shop at stores that offer both in-person and digital presences, while more than half avoid retailers that do not offer electronic payment options and 68% are particularly interested in shopping with merchants that provide the latest payment methods.
Consumers also point to lack of preferred payment options as a key factor behind abandoning their carts at checkout. Cart abandonment impacts almost 75% of global purchases and can cost merchants a staggering $4 trillion annually. Gearing up to enable a variety of cross-border digital payment options helps merchants to reduce cart abandonments and increase online conversions.
The continued growth in cross-border sales and the use of alternative payment methods by consumers demonstrates that digital payment adoption is altering global payment infrastructure on two distinct fronts.
First, the payment system is evolving to enable an increasing amount of contactless transactions via cards, digital wallets, instant payments, bill payment solutions and pay-per-link. At the same time, cryptocurrencies, BNPL (Buy Now Pay Later) and other newer alternative payment methods represent an additional shift in the ecosystem.
Together these market changes are making cross-border payments more frictionless and streamlined, resulting in online transactions that are faster, more transparent, more efficient and more secure than ever before. From a merchant perspective, tailoring the checkout experience to meet consumers’ expectations for speed and seamlessness results in higher customer satisfaction and payment approval rates, leading to increased sales and online revenue.
To help merchants answer the growing demand and need for more payment options, PayU’s advanced payment gateway offers not only an efficient way to reach new audiences, but also the ease of growing sales via a single, direct connection to popular global and local online payment methods throughout the entire world.
Here’s a quick overview of some of the key emerging markets around the world where PayU offers merchants access to important local payment methods, many of which are not always available with conventional payment gateway providers.
As the opportunities and importance of cross-border e-commerce continue to expand, global merchants must look for ways to reduce friction and improve customer experience and engagement during the checkout process.
On the customer side, an increasing amount of both local as well as global e-wallet products are making it easier than ever for customers to purchase items online, reducing the checkout process a matter of few clicks while allowing customers to have confidence that their information is being handled safely and securely.
For merchants, new digital payment options are helping to create improved checkout experiences, both when it comes to speed as well as increasing conversions by minimizing the probability of abandoned carts.
As merchants look for ways to tap into new markets in the midst of the global boom in e-commerce, the importance of offering as many payment method options as possible has never been more apparent.