How alternative online payment technology continues to gain momentum
Across the globe, eRetail is now the mainstream -- with well over half of all adults making purchases for products and services online, increasingly from their mobile devices.
Meanwhile, traditional bricks and mortar retailers have had to incorporate digital channels into their offerings. Unfortunately for the retailer, there are numerous steps during the online shopping experience where the shopper may abandon their journey to payment.
Online payments market development
The value of spending on remote payments for digital and physical goods will surpass $3.3 trillion this year -- that's up 10 percent on the 2017 total of $3 trillion, according to the latest worldwide market study by Juniper Research.
The new research findings uncovered that alternative payment mechanisms would comprise an ever increasing proportion of online spending.
PayPal already accounts for 20 percent of mobile and online physical goods transactions made outside China, while the success of Alipay and Weixin Pay within China means that these two players combined now account for 45 percent of global payment volumes.
It also claimed that there was a significant opportunity for more nascent options, such as the various OEM-Pay solutions and carrier billing, recently adopted by Amazon in Japan for physical goods purchases.
The market study findings also highlighted the major pain points for merchants and their customers. It argued that European merchants needed to be aware of the implications of PSD2 on card-on-file, meaning they would need to be ‘white-listed’ by consumers for payment details to be stored.
Indeed, it claimed Secure Customer Authentication (SCA) obligations could potentially adversely impact on conversion rates by increasing friction at checkout.
Meanwhile, the research noted that retailers were struggling to resolve issues around customer identification within the broader commerce framework.
Outlook for online payment applications
"Payment processors and other key stakeholders need to work closely with merchants to ensure they can recognize individual consumers, regardless of device and whether they are purchasing online or offline, to deliver the optimal experience across the retail lifecycle," said Dr Windsor Holden, head of forecasting & consultancy at Juniper Research.
Furthermore, the research stressed that not only should merchants localize supported payment mechanisms, but also the entire payment flow. Therefore Juniper analysts recommended they work with payment processors to test optimal flows for target markets.
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