E-commerce is about much more than just convenient shopping and fast delivery. E-tailers need to be paid, and customers want to know they can make a payment securely and quickly. E-payments are the engine that drives e-commerce, so it’s essential that e-tailers have it tuned to perfection.
I’m in awe of how easy it is to buy things online these days. It really can be as simple as clicking the buy button and getting your goods delivered the next, or even the same day! But what looks easy on the surface is really extremely complicated, especially the payment side of things.
Behind the scenes e-payments are made up of Payment Service Providers (PSPs) that connect web shops to payment institutions that approve, clear and process payments in seconds. The process is complicated by the fact that e-tailers need to be able to offer and connect with a full range of payment options to buyers, worldwide. On top of that come the added complications of mobile payments, and the growing use of mobile wallets, which also have to be fitted into the existing e-payment ecosystem.
The ecosystem is changing fast and a lot of that change is being driven by consumers.
Changes up ahead
This ecosystem is changing fast and a lot of that change is being driven by consumers. Why? Because payment is the point where e-tailers can lose customers the quickest. Research by Barclaycard says SME retailers in the UK estimate one in ten transactions are abandoned because shoppers can’t pay the way they want to. The lost sales account for some £8.7bn.
Three things have changed the e-payments ecosystem drastically over the past few years and they’re helping unlock the potential of the approximately 2 billion unbanked adults worldwide.
- Peer to Peer transactions or P2P payments, allow electronic money transfers made from one person to another through an intermediary. Paypal is the most well know of them all, but they’re also highly popular in poorer regions like Africa. P2P payment volume is expected to reach 86 billion dollars by the end of this year.
- Digital currencies and Blockchain are the hot topics in the world of e-commerce payments. And while we’re bystanders in Bitcoin’s roller coaster ride on the markets, it’s worth noting that there are already over 800 cryptocurrencies available which are accepted on many sites. Blockchain is considered the safest bet by many industries and entrepreneurs for e-payments of the future. The distributed, de-centralized database maintains a continuously growing list of ordered records called blocks, which make it highly tamper resistant and inherently traceable and transparent.
- Mobile payments allow consumers to pay for goods or services with their mobile phones. Investment in mobile money services has grown exponentially across the globe over the last few years with revenue share expected to reach 9% this year. Asia and Africa have seen the fastest take-up of mobile money.
Customers expect payment to be easy
It’s all about speedy and convenient payment options and more and more companies are able to offer this.
Consumers are starting to expect this level of security, and simplicity in all their transactions.
It’s now even easier to buy goods with Google Pay for instance, which has merged AndroidPay and Google Wallet into one service. Apple Pay lets users make payments across all Apple devices, even offering peer-to-peer payments with Apple Pay cash. Consumers are starting to expect this level of security, and simplicity in all their transactions.
China’s e-commerce and social media giants, Alibaba and Wechat, which operates the Alipay and Wechat Pay apps respectively, use a QR Code e-payment platform which is hugely popular in China. You can pay with these mobile payment systems in restaurants, museums, local stores, indeed practically everywhere. And with so many Chinese tourists visiting other countries, the system is spreading due to high demand: In April, the number of stores accepting Alipay in Japan will double to 45,000 this year.
Other Asian countries are adopting similar systems. Thailand’s domestic PromptPay e-payment service makes free of charge small-value money transfers via bank accounts and is expected to grow in popularity when it adds its own the QR Code system similar to that used in China.
Nevertheless, given that many Southeast Asians are still completely unbanked, cash on delivery remains the preferred form of payment in Vietnam, Indonesia and the Philippines for instance. The many fintech options out there, as well as major players such as Alibaba and Go-Jek, are working hard to bring solutions like Alipay, Ant Financial, Go-Pay and Grab into the region.
Tune up your engine
Because e-payments are such an integral part of e-commerce, we already enable all leading credit cards such as Visa, MasterCard and Amex, supporting all currencies on our Customer Web Portal. And for all our Chinese customers, we have also enabled eWallets – Alipay and WeChat pay – which support RMB at the moment.
If you want your online sales to be successful it’s important that you review your payment options regularly. New models are arriving on the scene that address specific merchant and customer requirements for specific regions, so keep your eyes peeled: a better solution could be out there that will drive your website to even greater success, and ensure your customers stick around for the ride.
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