Payments market watch: eCommerce Top trends to watch in 2024
Introduction
Technology and evolving consumer preferences are rapidly changing the payments space. Consumer demand for convenience, efficiency, choice and security are the key factors that continue to significantly impact the way people pay and expect to be paid. While eCommerce brands are looking to grow sales, curb processing costs, and maximize approval rates, they have recognized the significant role payment technology plays in accelerating their revenue. Keeping track of emerging payment trends ensures brands keep their customers loyal, stay on top of the latest in security advancements, reduce payment acceptance costs and optimize their payment performance – allowing them to realize full revenue potential. So what’s next in payment trends and what are the key payment strategies to leverage? Let’s examine what businesses can expect in 2024.
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Trend #1 Payment optimization is top of mind Strategies More businesses will turn to performance optimization to reduce the number of sales lost due to payment issues. Declined payments, payment complexity, security concerns, a lack of personalized and localized payment options are all common reasons for cart abandonment. Our research found that 70% of all drop-offs happen after the customer enters the payment flow and $260 billion in annually lost sales are recoverable through payment optimization. False declines have also emerged as a serious paymentsrelated revenue drain in eCommerce as their total cost far outweighs that of true fraud.
$443 billion annually is lost to false declines around the world1
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of all cart abandonment happens after the customer enters the payment flow
Work with a payment partner who can accurately identify the causes of failed payments and offer real-time data for increasing authorization rates Leverage technology that automatically resubmits declined transactions using custom rules tailored to your business and cascades payments to the most relevant cost-effective acquirers for highest approval rate Prioritize comprehensive tokenization solutions which include both PSP and payment network tokenization as well as vault integrations for best coverage and interoperability. This will reduce downtime risk, maximize transaction security and speed, while preventing involuntary churn caused by outdated customer payment details
82% of online retailers struggle with identifying the causes of failed payments
$260 billion in lost sales are recoverable with payment performance optimization2
1 https://f.hubspotusercontent10.net/hubfs/2530812/downloads/false-declines-ecommercefraud-prevention-report.pdf 2 https://baymard.com/lists/cart-abandonment-rate
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Trend #2 Global expansion through hyper-localization Strategies Cross-border sales are expected to make 33% of all eCommerce spend by 2028, reaching $3.3 trillion in sales, up from 1.6 trillion in 2023. However, successfully selling in new markets takes a deep understanding of local payment preferences which can significantly impact conversion rates.
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of shoppers drop off if their preferred payment method is not offered4 of all online shoppers report shopping internationally3
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Optimize your payment page by offering the most relevant payment options in each market your business operates in, including digital wallets, BNPL options, instant bank transfers or cash vouchers When choosing a payment partner ensure you can tap into on-the-ground local expertise in your target regions and integrate the right payment mix on a market-by-market basis Leverage local acquiring for higher authorization rates and reduced processing costs. Opt for solutions with robust redundancy in your target markets, ensuring uninterrupted payment processing with access to multiple acquiring connections in each region
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https://www.forbes.com/advisor/business/ecommerce-statistics/ https://www.mollie.com/news/checkout-process-cart-abandonment-reasons
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Trend #3 Mobile-first commerce online and in-store Strategies With sales reaching $2.2 trillion in 2023, mobile shopping now makes up 60% of all eCommerce sales around the world. While it means increased focus on online mobile payment methods like digital wallets and payment apps, mobile retail is becoming an increasingly crosschannel experience and now plays a key role in a unified consumer journey both online and in-store - 67% of shoppers will buy online but pick up from the brick-and-mortar shop. Most consumers discover products on their smartphones, 78% of them will use two or more channels to research and purchase an item but expect consistent journey throughout.
Today, 55% of consumers are most likely to combine their mobile experience with an in-store visit, calling brands to optimize their approach to mobile-first commerce. For instance, if a customer tries on an item in-store but can’t find their size, they could use their phone to add the item to their cart on the brand’s website. Alternatively, a shopping assistant could use the shop's iPad to order the right item while the customer is still in the store. For a consistent customer experience, all of these touchpoints would be connected by an advanced omnichannel payment solution.
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of all eCommerce is mobile5
Ensure your platform is optimized for mobile shopping and payments, offering features like one-click checkout, mobile wallet integrations, and personalized recommendations Gain up to 9.5% revenue uplift7 by implementing an advanced omnichannel payment solution that is tailored to your business model and industry. This will offer your customers a consistent experience across all channels, with synchronized data and payment preferences on mobile, desktop and in-store
Consumers spend 4% more in-store and 10% more online with brands that have a strong omnichannel payment strategy8
Utilize consolidated reporting from all channels to increase consumer spend with personalized offers, targeted marketing, and inventory management that reflects your customers’ shopping habits
of consumers combine mobile and in-store shopping6
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https://www.statista.com/chart/13139/estimated-worldwide-mobile-e-commerce-sales/ https://gitnux.org/in-store-shopping-statistics/ https://www.globenewswire.com/en/news-release/2022/6/15/2463295/0/en/Omnichannel-Selling-Increases-Revenue-9-5.html 8 https://www.shopify.com/enterprise/omnichannel-ecommerce 6 7
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Trend #4 Card issuing services: expanding use cases Strategies The number of cards issued by digital platforms is expected to skyrocket
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from 500 million in 2023 to
1.3 billion in 20279 For eCommerce businesses, whitelabel card issuing has traditionally been seen as part of embedded finance offerings to consumers, aimed at encouraging higher spend with flexible payment options and fostering consumer loyalty. Now, the popularity of card issuing for businesses is increasingly driven by companies’ objectives that go far beyond creating consumer stickiness with the brand. These objectives include streamlining B2B payments, optimizing authorization rates, reducing processing costs and facilitating faster payouts both to customers and vendors, all within a unified payment platform.
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Replace invoice payments and checks with Instantly issued virtual cards. This will enable you to use funds collected from consumers for payments to suppliers or employees, improving cash flow and operational efficiency Collaborate with a payment partner who acts as both an issuer and an acquirer. This way your customers’ transactions will be managed by the same processor, leading to increased authorization rates and potential payment processing cost savings Use virtual card issuing to process instant payouts to customers or suppliers faster and at lower costs than traditional payout methods and bank transfers Integrate card issuing with loyalty programs, boosting customer retention and repeat purchases through incentives and rewards
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https://www.juniperresearch.com/press/modern-card-issuing-platform-leaders-revealed/
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Trend #5 The growing momentum of account-to-account (A2A) payments Strategies Account-to-account (A2A) payments in eCommerce are projected to grow by 13% by 2026, reaching $850 billion in global market value, and are set to challenge traditional payment methods for eCommerce and wallet funding. Countries like the Netherlands, Poland, India, Brazil,
Malaysia, and Thailand are already seeing A2A transfers as the leading online payment method. In the U.S., though adoption in eCommerce has been slower. Yet the impact of A2A payments is expected to be significant in 2024, especially with the Federal Reserve’s introduction of the FedNow
instant transfer system and potential new regulation coming into effect with the Credit Card Competition Act. This trend is accelerated by the rise of open banking, greater connectivity with real-time payments and supportive regulatory frameworks.
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Integrate real-time A2A options, such as Pix in Brazil and UPI in India, for enhanced cash flow management, reduced payment acceptance costs and zero chargebacks Connect loyalty programs with A2A payments for immediate rewards, incentivizing repeat purchases and boosting longterm customer value Increase conversions with Open Banking-enabled A2A payments. Open Banking unifies a consumer's financial data within a single interface, reducing checkout friction and converting up to 40% better than cards
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Open Bankingenabled A2A payments convert up to 40% better than cards
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Why Nuvei?
Best-in-class authorization optimization
On-demand human-led support
Multi-vendor support with an a-la-carte payment stack
Acquirer agnostic
Servicing over 200 markets worldwide, with local acquiring in 50
680+ local and alternative payment methods (APMs)
150+ currencies
Global gateway and technology
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ABOUT NUVEI
Nuvei (Nasdaq: NVEI) (TSX: NVEI) is the Canadian fintech company accelerating the business of clients around the world. Nuvei’s modular, flexible and scalable technology allows leading companies to accept nextgen payments, offer all payout options and benefit from card issuing, banking, risk and fraud management services. Connecting businesses to their customers in more than 200 markets, with local acquiring in 45+ markets, 150 currencies and 680 alternative payment methods, Nuvei provides the technology and insights for customers and partners to succeed locally and globally with one integration. For more information, visit www.nuvei.com
CONTACT US: 877-441-4729