When was the last time you paid with cash? A while ago, right? While many still prefer credit/debit cards, cash payment methods – digital and e-wallet payment options are equally gaining popularity.
Let’s understand it via the current non-cash transaction data:
- In India, 93% of users have used at least one digital payment method in the last year, while 96% are most likely to use it in the next year.
- In the US, 9 out of 10 people are using a digital payment method, according to McKinsey’s Digital Payments Consumer Survey. The report has found that in 2022, the use of digital payments in the US has grown by 11% when compared to 2021 – indicating a continuous shift to digital transactions.
Another report by Capgemini has revealed that despite the rising threat of recession caused by the coronavirus outbreak, the adoption of cashless payment methods is growing rapidly. As per the report, global QR code payment users may rise from 2.2 billion in 2020 to 2.2 billion in 2025. Similarly, eMoney transactions are expected to grow at a rate of 27% between 2021-2026, reaching about 161 billion in volume.
It has been found that ‘Comfort’ and ‘Security’ are the two key reasons why most people are preferring digital payment methods all over the world.
Cash is being replaced by cards and digital wallets in the e-commerce industry
The payment system in the e-commerce world is showing signs of growth as it rapidly moves towards meeting the demands of a smartphone-led online shopping culture, with cards and digital wallets gaining prominence.
According to Economic Times, in 2021, consumers making transactions for e-commerce were worth Rs. 5.21 trillion using the credit card payment method and Rs. 2.37 trillion using the debit card payment method.
Simultaneously, UPI, Wallet-based payment options are on the rise, with digital wallets projected to account for over 72% of regional e-commerce transaction values in 2025 as per Global Payments Report 2022 by financial products and services company FIS. Also, innovations around other payment methods are stepping up to meet the different needs of customers and merchants.
Therefore, we are certain that new payment trends may make an appearance in the future to further enhance the growing payment landscape.
How digital payment is revolutionizing the e-commerce industry?
The e-commerce industry in India has seen rapid growth since the pandemic, with digital payments inspiring more people to shop online.
Nowadays, more and more people are using digital payments. As a result, merchants are improving their payment infrastructure to provide their users with a smooth shopping experience.
Here’s an overview of how digital payments are driving the e-commerce wave:
The days of long ATM queues are over thanks to eCommerce and digital payment solutions. These new technologies allow consumers the convenience of conducting financial transactions without worrying about having enough cash on hand, as they can easily do so through an app or online account instead.
Product Line Expansion
Traditionally, businesses have had a difficult time displaying their products because they are limited with space. However, e-commerce businesses have no space constraints as all their products are catalogued online. Therefore, brands can sell more products easily through online platforms that are supported by digital payment methods, coupon/discount management options, and seamless checkout pages.
Low Operational Expenses
The low operational cost of digital payments is an attractive option for businesses. By not having to handle money orders or cheques, your business can speed up cash flow and reduce manual effort- all while increasing efficiency.
The e-commerce industry is at risk for cybersecurity threats like denial-of-service (DoS) attacks, automated bots that complete transactions using stolen credit card numbers and even skimming. But some companies have solutions to make sure they are PCI DSS compliant so you can safely accept payments from clients while securely processing all your online purchases.
E-commerce businesses must adopt digital payments or be left behind
In a world where everyone has access to money via their phone, cash would seem like a nostalgic relic of the past. Cashless payment systems are already widespread in some countries and continue to expand rapidly around the world. From the above data, we know that mobile payments will eventually dominate physical card usage around the world within a few years. So, when shoppers nowadays can unlock all, they need through a smartphone, they will no longer need to carry a wallet or purse.
By 2027, experts predict the digital payments market to increase in value to almost $13 trillion, and mobile payments are set to be a key part of this revolution. By providing mobile-friendly digital wallet payment options along with card acceptance at both your point of sale and e-commerce checkout, your company can be at the forefront of today and the future.
How can businesses better serve their clients? We believe there are three different ways you can take a step right now:
- Give your B2B business a competitive edge with automated processes, systems that speak the same language and data analytics to personalize engagement.
- Include modern payment methods during checkout to boost product and sales velocity.
- Get in touch with a reliable provider that can help you provide digital payment solutions to give your company a competitive edge.
The automation platform, RackNap helps you offer online payments to your customers to have an easier experience. It also provides a customizable marketplace, automated follow-up emails or scheduled invoicing, business intelligence, and product lifecycle management which can boost profits even more while providing peace-of mind.