Online shopping is growing in popularity. Despite the rise in online shopping, many people are still concerned about the inconveniences of buying things online. Online merchants are still hesitant to ask for credit cards and other personal information.
An ecommerce site must offer a smooth, safe, secure, and reliable shopping e
The pandemic led to rapid digitization of the payments industry by up to three years. Lockdowns, restrictions, and ongoing consumer health issues disrupted daily life and impacted consumer spending habits and spending patterns.
A look at the payment processing industry
As consumers and businesses shift their dollars from cash and checks to online payment methods, the power dynamics of the payments industry are changing. While cards dominate in-store retail channels, mobile wallets such as Apple Pay are gaining popularity and pave the way for the future in payments.
Ecommerce will also reduce brick-and-mortar retail, as smartphones are attracting a growing share of digital shopping. As they become more useful and appealing, digital peer-to–peer (P2P), apps are replacing cash in users’ day-today lives across generations.
This is changing the landscape in larger industries that were once dominated by cash and checks, such as remittances or business-to-business payment. Providers are competing for market share. Providers are being forced to diversify as they seek new volumes due to skyrocketing consolidation.
As smartphones continue to attract more digital shoppers, e-commerce will be a threat to brick-and-mortar stores.
The payment industry explained
Insider Intelligence’s report examines the current payments ecosystem, and how the pandemic will impact growth drivers and the industry’s long-term future. The report starts by detailing the journey of online and in-store payments, from processing to settlement. The report then explains how pandemics have impacted the use of different payment methods. It forecasts growth and identifies drivers for key digital payment channels as well as transaction types.
It also highlights three emerging trends in the industry. These include surging fraud, revenue crunch and rising demand from white-labeled payment features from unorthodox players.
In-store payment methods
Although in-store payment methods declined slightly by 3% in 2020, they still hold the majority of sales. As cash and check usage slows down, debit and credit cards continue leading the segment. Mobile payments will be a major focus in the coming years thanks to a growing contactless penetration.
Ecommerce growth
Ecommerce is expected to continue to outpace in-store retail payments. Due to the increased use of smartphones, online retail sales soared to $794.50 Billion, an unprecedented 14.4% of all US retail sales in 2020. Ecommerce will account for 21.0% in retail sales this year.
Digital Payments
Digitization of payments doesn’t only affect retail. Real-time mobile P2P and digital remittances payments as well as digital business payments continue to flourish as technology advances. According to Insider Intelligence estimates the mobile proximity payment volume increased to $131.36 million as more users joined major wallets at an unprecedented rate in 2020.
Credit cards
Credit card payments will increase from $1.75 trillion to $1.82 trillion by 2024, a 0.79% compound annual growth rate. Strong rewards programs and high credit appetite–which will increase as issuers strive to keep their payments solutions top of wallet–will encourage spending and help the segment tick up. However, growth will be slower that inflation.
How does this affect your small business?
Many businesses had to open online business because of the pandemic. Many small businesses were limited to only operating their business in brick-and-mortar locations and did not have the necessary payment processing tools. Many brick-and-mortar shops were unable to pay their bills.
Even though they had an online presence, many people were reluctant or prevented from leaving the premises. Many small business owners were forced to open a website to sell their products online. However, many of them found that third-party companies were able to process credit card payments.
Businesses are now opening more and are operating more online. It is time to look for better credit payment options that are safe, offer more options for your customers, meet your online business volume, and fall within your budget.
The pandemic highlighted how brick-and-mortar shops were being decimated by e-commerce. You don’t want your small business to fall victim to the e-commerce boom then you need a better credit card payment system. It is time to find a company that offers many options while staying within your budget.
Balanced Payment Partners offers a wide range of payment processing options, from solutions that fit smaller budgets to more expensive payment gateway solutions. To ensure small businesses can take advantage of the E-commerce boom, we work with top industry partners.
If you would like to learn more please visit our website or call us (800) 354-6256 or via email [email protected]. Our staff is here to assist small businesses with overcoming the challenges that brick-and-mortars face and bringing your business into the world E-commerce.