The three payment trends powering the digital economy

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By Antoine Nougué, head of commercial, Checkout.com 

The ability to securely, reliably, and seamlessly move money around the world has played a major role in the growth of ecommerce. Today, effective payments continue to play a critical role — not just as a facilitator of money movement but as a linchpin for innovation, helping companies redefine business models and build the next generation of the digital economy. 

So, what are the trends in payments that are currently driving innovation?

Protecting revenue with optimized payments 

The seamlessness of the payment experience can make or break a sale. Customers who face friction at the checkout, cannot use their preferred payment option, or have their payment wrongly declined are left frustrated and, often, will abandon their purchase. Our research illustrates this point. We found that 52% of customers will abandon their cart if the checkout and payment process is overly complex. That equates to billions of dollars in revenue needlessly left on the table.

This issue poses a real challenge for retailers, especially as a larger percentage of their sales are made online, and customer acquisition costs reach all-time highs. 

Despite these facts, many businesses are unaware of the impact of poorly-functioning payments on their bottom line. Our research showed that 31% of European businesses reported losing revenue due to payment issues. The truth is that the real number is likely much higher. Underreporting generally stems from the fact many businesses just don't know what's happening with their payments. This is usually due to a lack of data on payment flows, not enough focus on payments internally, or a misunderstanding of how payments function – and often all of the above. 

This reality is what we call the 'payments black box'. And we've helped countless businesses crack it open, shining a light on the impact of payments on their bottom line and working with them to build solutions that drive meaningful change. 

Take Chrono24, for example. Since working with Checkout.com, it's achieved greater visibility into its payment flows. Visibility that's empowered it to take informed steps to improve how it processes its payments. As its Payments Lead, Christoph Emminger, explains: "We can now see why issuers in different markets are rejecting payments. And Checkout.com supports us to develop action points to drive improvements, such as optimizing the data we send alongside each payment."

Facilitating business innovation and growth

Optimizing payments to avoid revenue leakage is just the beginning. Once businesses start focusing on payments and have visibility into their cashflows, they see ways to use them to foster customer loyalty and grow their revenues.

For example, did you know that customers will frequently shop with businesses that allow them to pay with their preferred payment method? Take Buy Now, Pay Later (BNPL), for instance. In just over a year, it emerged as a 'must have' payment option for businesses selling online, especially to younger demographics. According to PayPal, 28% of consumers ages 18-39 are now more likely to shop at a retailer again if they offer BNPL. 

Unlocking new channels of commerce is another growth area where payments have a pivotal role to play. Social commerce, in particular, is trending in ecommerce. We found that 67% of US-based businesses believe social commerce is the most important retail trend this year. 

Integrating payments is fundamental for all new sales channels. Checkout.com unlocks channels and facilitates new models because it enables a multitude of different payments through a single integration. Wherever customers are in the digital world, they can make payments through their preferred channel using a tool like Payment Links.  

A final growth trend we see picking up the pace is retailers' adoption of subscription services.  Our research finds that 50% of US businesses believe subscriptions will become an important part of their consumer offering, and 31% of US and UK businesses are launching subscription offerings. Again, the ability to effectively collect recurring payments is critical to the success of any subscription service. 

Furthering trust in the digital economy

As the digital economy grows, maintaining consumer and business confidence will depend largely on the security of online payments. Fraud is a constant threat which can deter shoppers from buying online and damage both the reputation and revenue of retailers. 

We find that businesses are acutely aware of the risk – which has increased markedly during the pandemic — with 41% of those we surveyed saying cybercrime and fraud are the top concerns for 2022. And there is an increased focus on leveraging the latest tools and technologies to minimize the risk. 

However, the challenge we're helping businesses solve is how to mitigate the risk without impacting the customer experience. Access to data and flexibility is again key. Our platform provides a detailed view of transactions and counterparties. It ensures transparency and intelligent insights about every payment, and can be customized to merchants' specific needs and risk appetites. From simple rules to powerful machine-learning models, the merchants we support can build a risk strategy that's right for their businesses.    

Spanish beauty disruptor, Freshly Cosmetics, is one company we've supported in this regard. Since working with Checkout.com to enable optimized customer authentication, it has experienced zero payment disputes and a near 100% payment acceptance rate. 

The power of payments: Partnering with Checkout.com  

Since 2012, Checkout.com has been at the forefront of development in digital payments. We've worked in partnership with businesses worldwide to build a flexible payments platform designed to empower them to succeed in the digital economy. But there's still much to learn and to build. Global payments are complex and ever-evolving. And we are, as our Founder and CEO Guillaume Pousaz often says, only at chapter one of the journey.

Customers as diverse as Grab, Getty Images, and Sony trust Checkout.com to provide seamless integrations and actionable payments data. Whatever the industry or sector, our platform can optimize every part of the payment journey and create the most robust foundation for ecommerce — today and tomorrow.

Visit Checkout.com to learn more.

This post was created by Checkout.com with Insider Studios

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