As global e-commerce revenue is projected to exceed $4.8 billion by 2025, the payments landscape continues to evolve rapidly, driven by shifting consumer preferences and technological advancements.
With consumers demanding seamless, secure and flexible payment experiences, merchants must adapt their strategies to stay competitive in this dynamic environment.
Checkout optimisation has become a focal point for e-commerce success.
According to research by Ecommpay in partnership with IMRG, 69% of UK online shopping carts were abandoned in Q3 2024, with conversion rates hovering at only 58%.
Common reasons for cart abandonment include unexpected costs, slow website speeds, limited payment options and complex checkout processes.
To combat this, merchants are increasingly adopting express checkout options and a wider variety of payment methods.
Ecommpay’s data shows that conversion rates improve significantly as merchants expand express checkout offerings.
Businesses without express checkout see a 52% conversion rate, which rises to 67% for those providing four or more options.
This underscores the importance of streamlining the checkout process to reduce friction and improve customer satisfaction.
Addressing Cross-Border Payment Challenges
The rise of cross-border e-commerce has brought unique challenges, particularly regarding payment localisation.
Half of merchants selling internationally now provide localised payment options to cater to customers overseas.
Dynamic checkouts that present region-specific payment methods and currency options have proven to boost conversion rates and enhance customer trust.
However, issues such as IBAN discrimination remain significant hurdles.
Despite the promise of a unified payments market under SEPA, many businesses still refuse to accept non-domestic IBANs.
This not only impacts customer experience but also hinders merchants’ ability to scale internationally.
Open Banking virtual accounts are emerging as a solution, enabling businesses to process payments through local IBANs and reduce friction in cross-border transactions.
The Growing Role of Open Banking
Open Banking continues to gain traction, offering merchants a streamlined and cost-effective payment method.
By integrating Open Banking into their payment stacks, businesses can reduce transaction costs, increase authorisation rates and offer customers a secure, real-time payment option.
However, the success of Open Banking hinges on careful implementation.
Many merchants partner with Payment Service Providers (PSPs) to manage the complexities of onboarding and integrating multiple payment methods.
A single PSP can offer a comprehensive solution, providing access to global payment methods, express checkout options and increased operational efficiency.
The BNPL Boom and Marketplaces
Buy now, pay later (BNPL) solutions have transitioned from a pandemic-driven trend to an established payment method.
As the sector matures, providers are focusing on responsible finance and longer-term lending options to ensure sustainable growth.
Additionally, marketplaces are becoming a dominant force in e-commerce, prompting payment providers to tailor solutions specifically for these platforms.
Merchants are increasingly leveraging marketplaces to expand their reach and tap into underserved markets.
What Lies Ahead for E-Commerce Payments?
The e-commerce payments landscape in 2025 will be shaped by several key trends:
- Enhanced Security: Companies like Mastercard are leading the way by tokenizing card payments, boosting security and improving conversion rates.
- Global Expansion: Cross-border e-commerce will continue to grow, with increased demand from regions like the Middle East and Africa.
- Simplified Payments: Innovations in tech are driving the rise of one-click payment options, making transactions faster and more convenient for consumers.
Merchants that embrace these advancements while addressing challenges such as IBAN discrimination and cart abandonment will be well-positioned to thrive in the ever-evolving e-commerce ecosystem.
By prioritising customer-centric payment solutions, businesses can enhance trust, boost conversions and unlock new growth opportunities in the global market.
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