E-Commerce Payment Trends to Take Off in 2023
Did you know that E-commerce is a $2 trillion industry?
E-commerce app development is of great value to businesses and consumers. Any business that wants to succeed needs to identify its target market, and an e-commerce development firm offers just that. Coming out of the COVID-19 pandemic, the assumption was that consumers would want to shop in physical stores again after being confined to the internet for far too long. But it is apparent to businesses that a physical presence is as important as a digital one.
While E-commerce app development has existed for a long time, it is the way that it has evolved over the years that interests us. What are the different payment trends in E-commerce that will reign in 2023, and how can we better prepare ourselves for them?
Popular trends to look out for in 2023
Although the typical consumer’s method of paying for goods and services has changed, we are not yet prepared to solely rely on online transactions. Paper receipts are becoming less common, as are digital wallets. One-click payments have made life a little easier, but the occasional trip to the ATM is still necessary. Online and offline payment methods will both be dominant. It is reported that in 2020, $3.9 trillion worth of frictionless payments were made. The figure predicted for 2024 is $8 trillion.
As we move forward, E-commerce development firms will provide the customer with the ease and freedom of choosing how to pay. This will become the cornerstone of the customer experience and propel businesses into the modern era slowly but surely.
Building on the previous point; digital wallets will gain popularity and be used alongside traditional payment methods. We can expect Apple Pay, Google Pay, Shop Pay, and the like to witness a surge in users. The best e-commerce solutions will be offered to you at the checkout counters, and the absence of digital payment choices will simply give your rival an advantage.
A digital wallet acts as your credit and debit card, giving you access to your accounts and the convenience of transferring money whenever needed. A digital wallet allows you to go cashless and get a better handle on your finances. It is also a time saver and makes shopping an absolute breeze.
With an increased reliance on smartphones, the prevalence of digital wallets is to be expected. It is predicted that in 2023, about 4 billion consumers will be using digital wallets, exceeding 1.6 billion at POS.
Buy now, pay later (BNPL)
Buy Now and Pay Later systems are becoming increasingly common and this can also be linked to the COVID-19 pandemic which affected the global economy in many ways, some of which have yet to be unraveled. These payment channels were a relief for those facing financial uncertainty during the lockdown, but as the recession of the 2020s looms, we can only expect the need for the best e-commerce solutions to increase.
As a business owner, the goal is to convert, and what’s a better way than selling a high-priced item with the promise of lower initial payments that will not break the bank? While the implications of BNPL payment systems have yet to be explored, there will be a 24% increase in such transactions in 2026. 65% of merchants will be incorporating the BNPL methodology into their payment channels, following the lead of Affirm, Klarna, AfterPay, and the like, giving customers the comfort of knowing that they can purchase Charlotte Tilbury’s Pillow Talk today without tapping into their savings.
As we adopt a digital-first approach to commerce, the need for improved cybersecurity becomes more apparent to E-commerce development firms. There are many ways that e-commerce payments will be influenced by cybersecurity measures. With the right data privacy practices, the longevity of e-commerce and businesses, in general, can be ensured.
Businesses will be held responsible for the attention they put into protecting their users’ data. In fact, businesses will strive to implement the newest and most sophisticated technologies to get the attention of the masses.
There will be a significant increase in the adoption of tokenization within the e-commerce payment industry. More users will demand that their PII be separated and that payment gateways are used to ensure that a breach is not possible. Popular payment gateways used in the United States include Braintree, Affirm, Amazon Pay, and Quickbooks among others.
Imagine having a monthly or yearly subscription to the products that you really love and that work for you. Many beauty and fashion brands are adopting this business model because customers love the added convenience of having their favorite products being delivered to their doorsteps alongside the intuitiveness of as-per-need basis refills, and replacements that make perfect sense in this day and age. Subscription models are becoming increasingly common and here are a few examples.
Scentbird is a great online service that not only sends you travel-size samples of different perfumes to try out, but it also creates a personalized selection of fragrances for you. If you feel that you don’t know much about fragrances, Scentbird is exactly where you can start. With a Scentbird subscription, you get a selection of perfumes delivered to your door every month. By filling out a simple form you have ensured that your future self is stocked with only fragrances that you love. You get to discover new scents in the process without ever having to waste money on buying full-size perfume bottles that aren’t the right fit for you.
Functions of Beauty
Functions of Beauty allows you to create your own hair care routine, by delving deeper into your personal concerns. The products are delivered to you, so you don’t have to go out every couple of months to find new products that may or may not work for you.
We are entering the golden age of automation. If we can automate emails, bills, and dentist appointments, then why not our shopping experience? With the help of modern technology, E-commerce development firms are providing customers with a type of convenience that was once inconceivable.
Subscription models will be incorporated by businesses, especially those that do not have a brick-and-mortar presence. Studies show that 80% of businesses plan to use a subscription model by 2025. In essence, these models provide the same type of convenience that BNPL payment systems provide. But in this case, you are creating unparalleled utility for customers and creating a system for prospective conversions.
AI is bound to open new avenues for e-commerce and push the industry to new heights by providing superior customer support and market penetration. With the globalization of sales that is made possible by e-commerce, any business will require 24/7 customer support, and the most cost-effective way to do that by far is through bots. Aside from providing seamless interactions with customers, AI can also help create personalized shopping experiences and provide fodder for smart searches, inventory management, and data collection. It’s no secret that the use of cutting-edge technology can always put a business ahead of its competitors.
AR/ VR technology is an emerging giant and will have a notable impact on e-commerce payment systems. Studies show that the estimated global market for AR/VR is to reach $65.8 billion in 2023. As this type of technology affects how consumers interact with the brand, it is reasonable to assume that there is enormous potential for revenue generation. The most prominent use of AR/VR in the e-commerce industry is solving industry-specific problems and engaging customers virtually.
One of the biggest challenges faced by the e-commerce industry is the ‘abandon cart’ phenomenon. This is clearly a broken link in the customer journey, which AR and VR can allow businesses to better convert with the help of virtual showrooms such as Holoroom.
E-commerce has created many opportunities for small and large businesses while giving a whole new meaning to the customer experience. E-commerce is a lucrative industry that will be greatly impacted by the payment trends predicted for 2023. It is important to understand how these trends will affect digital payment systems and the way businesses position themselves. Citrus Bits is a leading mobile app development company based in the United States that focuses on creating e-commerce applications catering to the dynamic nature of the industry and business needs.
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