Among the many sectors in which the COVID-19 pandemic has hugely impacted, the prevalence of digital payments is rising at breakneck speed for both online marketplaces and brick-and-mortar stores.
It’s beyond dispute that many factors have contributed to such a change in payment behavior, which include and are not limited to:
- The prevalent use of smartphones
- The introduction of digital wallets
- The innovations in mobile/QR-code payments
- The ‘social distancing’ policy: Consumers opting for online marketplaces to minimize social activities and contacts
- Public health concerns: Avoiding the use of cash
- The rapid growth of eCommerce
On a side note: Feel free to read our blog wherein we’ve addressed 5 trends to watch in the new normal of eCommerce! https://bonuship.com/en/blog/crowdfunding-fulfillment/5-trends-watch-embracing-new-abnormal-ecommerce-logistics
While issues concerning cybersecurity and privacy may come along with the growing acceptance and adoption of digital transactions and currencies, one thing for sure is that:
We are embracing a cashless economy.
The idea of ‘cashless’ has hinted at a new normal in how we manage and use money, visualizing a clear picture of a heavily digitalized future of money in both developed and emerged economies.
According to Capgemini’s World Payments Report 2020, non-cash transactions showed a surge of almost 14% from 2018-2019 to reach over 700 billion transactions. This is just one of the many pieces of evidence regarding the pandemic being the catalyst of this movement away from physical cash.
Thanks to the digital advancements in financial technology - FinTech, digital payment system is now regarded as an essential practice instead of a competitive edge among banks and payment service providers.
Giants like Apple, Google and PayPal have been dominant in the market, with emerging payment providers like AliPay, WeChat Pay chasing behind - along with the rise of cryptocurrencies such as the open-source Bitcoin that may soon take the world by storm.
Moving towards a cashless society is an evolution that is strongly favored by consumers globally.
It’s undisputed that this cashless trend has drastic influences on the eCommerce sector. While it looks optimistic to a large extent, the dark sides are always untold.
The Pros of Using Digital Payments
Generally speaking, the ecosystem fostered by cashless payments stimulates e-consumption - making payments online has become easier than ever before.
With a smart device and internet access, shoppers can enjoy great convenience, flexibility, and ease of ‘control’ as in to shop at any time and anywhere. This change in shopper behaviors, from the merchants’ POV, is an open door to countless eCommerce opportunities.
In our blog about shopping cart design, we’ve emphasized how critical a checkout page is, as in a seamless one encourages shoppers to proceed with their shopping activities and a poorly designed one discourages shoppers' activities.
The same applies to payment options and innovations.
A smooth payment process enhances customer experiences, provides greater convenience, and lowers the chance of shoppers abandoning their orders. Hence, providing and optimizing the ease of payments in terms of flexibility and convenience can be a low-key yet effective way of driving eCommerce sales.
The Cons of Using Digital Payments
The emerged reliance on digital transactions and currencies can be a double-edged sword situation.
Going online has become almost our daily activity, making the digital world a hotbed of cybercrime. As such, cybercriminals and hackers leverage computers as instruments to commit illegal activities - from phishing scams, hacking to stealing personal data and more.
This unpleasant phenomenon can be observed from the increasing number of reported eCommerce frauds, fake products and online ads in recent years. Further to the cases, the Cyber Peace Foundation has identified about 100k hostile domains on various communication and selling channels.
Even though it’s everyone’s responsibility to pay heed to cybersecurity and privacy - needless to say, these concerns can lead to trust issues and scare shoppers away from making online payments on your eCommerce sites.
Therefore, maintaining your eCommerce site with a high level of internet security is key to building a safety zone for your customers to make purchases.
Now that eCommerce and digital payments are showing a two-way influence - let’s stay up-to-date with big trends and strive to thrive!
Capgemini’s World Payments Report 2020 - https://worldpaymentsreport.com/non-cash-payments-volume-2/
Cyber Peace Foundation: https://www.cyberpeace.org/