The current global climate has greatly increased the velocity with which ecommerce is advancing globally. Digital sales are no longer an ‘add-on service’ provided by organizations innovative enough to take that step; they are now a crucial and necessary part of a business survival strategy.
Through necessity and the need for organizations to maintain business continuity throughout the economic crisis, the division between bricks & mortar and digital commerce no longer exists. Traditional businesses that were once firmly in the physical domain have now gone digital. Businesses have come to realize that they must blend both channels into a seamless experience – or they won’t survive.
Digital commerce is here to stay
According to recent Forrester data, people globally are engaging in digital commerce for the first time. In China, 24% of consumers tried ordering their groceries online; in Italy,14% of consumers have signed up for video streaming; in the US, 12% have begun taking online exercises.
In the world’s two largest ecommerce markets, consumers are using digital payment methods for the first time. That is, 20% of Chinese consumers and 11% of US consumers.
Fintech experts believe that up until 2020, consumers were undoubtedly the market-makers, and this is still true to a point. But in 2020, COVID-19 became the market-maker, forcing consumers, many of whom who had never really engaged in digital shopping to make the change – whether they liked it or not.
Trends and developments altering the payments landscape
In the last five years, the payments industry has seen several shifts in trends regarding customer behavior, including the adoption of new payment methods and the addition of emerging technologies. Each of these trends seem to indicate the coming of a more cashless society.
The huge push towards contact-free payments has come about as a result of the three major payments trends: touchless payments, payments security and real-time payments.
What changes mean for retailers, merchants and acquirers
The digital payments infrastructure has been available to merchants for quite some time, yet generally, the adoption of payment technology that enables cross-border, omnichannel and better digital experiences for consumers has been until now, surprisingly slow.
To keep the competitive edge in this constantly changing new world of ecommerce, merchants need to rethink and upgrade their customer experiences. Alternative payment methods (APMs) such as bank transfers and e-wallets are quickly gaining market share. Businesses will need to embrace a cards-plus payments strategy which includes alternative and local payments methods.
Cross-border expansion has created new challenges and complexities for merchants who now need to work with multiple vendors for cards as well as additional vendors for APMs.
As the world moves towards a post-COVID economy, businesses worldwide are accepting the reality that cross-border digital commerce is a vital component of their business continuity plan. By adopting a global mindset, businesses can circumvent their competition.
COVID-19 is the architect of an increasingly-connected world, and now, through the ongoing development of technology, it has also spurred the exponential growth of a fully connected economy.
As this connected economy continues to grow, payments organizations need to prioritize seamless, frictionless payments. But they must also take security into account, with adequate protection through authentication. Biometrics, voice recognition and other new types of digital verification will continue to add new layers of security to the evolving payments landscape.
For a more detailed look at the trends, challenges and solutions facing the changing payments space, download our in-depth guide Managing Your Changing Payments Environment.