The post-pandemic payments opportunity

The rise of eCommerce over the last year has presented an excellent opportunity for online merchants. Still, it has also made the space much more saturated as new vendors move online to get a slice of the action. With fierce competition, eCommerce businesses need to optimise every customer touchpoint to attract consumers and retain customer loyalty.

Despite the disruption of the last 18 months, the huge shift towards digital technology has created vast potential for merchants to tap into new revenue streams and audience groups. 

As the world’s digital transformation continues, greater focus will be placed on customer experience. Perhaps the most critical element of the customer journey is at the checkout, which must be fast, seamless and secure to ensure conversion. 

More than half (57%) of consumers now pick the brands they buy from, partly based on the payment methods offered. Therefore, partnering with the right payment provider is the first and most critical step for merchants in optimising their eCommerce models and capitalising on the post-pandemic eCommerce boom.

Setting the stage for the future of commerce

The COVID-19 pandemic has had a significant impact on consumer behaviour, with more people now buying online than ever before. eCommerce sales are on track to reach a staggering $6.5 trillion by the end of 2023, creating a booming post-COVID market that presents a huge opportunity for retailers.

With social distancing measures and lockdowns, online sales rose from 15.8% of overall UK retail sales in 2019 to 23.3% in 2020. While lockdown restrictions are gradually easing in Britain, it is undeniable that this digital shift will have a lasting impact on the way we buy. The death of the high street and cash had been touted long before Covid-19 ever came to our collective consciousness, and arguably, the pandemic simply accelerated the pace of transition. Covid-19 necessitated a move to digital, even among those who had previously been resistant to change. 

When asked about how they intend to shop in future, one in five (21%) respondents to our consumer survey said they would shop less on the high street versus before the pandemic. This presents a golden opportunity for online retailers to reach a much wider audience. What’s more, as the path to ‘normality’ remains uncertain, businesses have little option but to build their digital presence to retain a captive audience. The path to purchase can be further optimised by ensuring consumers can move seamlessly between one channel and the next, virtual or physical.

The boundaries between the offline and online world are increasingly thin; with it, the number of available payment options is growing. Although traditional payment methods remain popular, their hold on the top spot has diminished as mobile payments, digital wallets, cryptocurrencies and Open Banking have all gained ground. What’s more, 46% of people in the UK say they use their smartphone more now than they did before the pandemic, with a quarter (25%) respondents to our survey anticipating that they will use their mobile phone more to make payments following the pandemic. 

By comparison, 28% of consumers in our research said they would like to use cash less after the pandemic than they did before and 13% said they don’t want to use it at all. Although individuals may want to view something in a store, they may still opt for digital options when making the purchase. The pandemic has opened our eyes not only to the viral risks presented by physical cards or cash, but also the convenience offered by digital alternatives. 

With such a boom in digital technology, retail is no longer as restricted by geographic borders. Tapping into the cross-border market presents a huge growth opportunity for retailers to access billions of potential new customers. With a 57% YoY increase in outbound eCommerce cross border sales from the UK in 2020, merchants need to ensure that they have the local market knowledge and expertise to penetrate their desired region successfully.

Making the most of the opportunity

With convenience and speed so crucial in the modern consumer's mind, it’s clear that a seamless eCommerce journey is essential for both converting new customers and retaining loyal users. Targeting shoppers overseas adds further complexity. 

Businesses must utilise a deep understanding of consumer behaviour, currency and payment method preferences, regulatory requirements, and security. There are currently over 180 currencies in circulation globally, and research shows that over 13% of online shoppers will abandon their basket if the price is labelled in a foreign currency. Not just this, but regulation also differs by location, with certain regions such as the EU having established legislation frameworks like PSD2.

Additionally, in today’s digital world, merchants cannot afford to compromise on security. While there are considerable advantages to accessing a global market, consumers must have an assurance that their sensitive data is secure before engaging in transactions. As eCommerce sales spiked during the pandemic, so did fraudulent activity, and this is expected to see continued growth of 60% over the next year. When thinking of the post-COVID eCommerce era, it’s more important than ever that merchants prioritise security in their payment architecture. Leveraging advanced anti-fraud solutions and protocols will help eCommerce businesses to protect their customers and safeguard their revenue.

All this may seem a lot for a retailer to contend with. However, by working with a payments provider that acts as an integrated partner and shares insights and expertise to increase payments performance, retailers will not only survive, but thrive. For businesses looking to capitalise on the booming post-COVID market, it’s essential that they work with a payments provider that will help them identify optimisation areas and provide an intuitive customer experience across all touchpoints. In this way, payments post-pandemic will present business opportunities rather than being a simple necessity.