How ecommerce payments will change in 2022.

Starting an ecommerce company has never been easier thanks to ecommerce platforms like Shopify, WooCommerce, and Wix. Companies and entrepreneurs can now build their online stores in a matter of hours. At the same time, the global payments landscape has become more complex than ever. Merchants and marketplaces face an ever-more fragmented payments ecosystem. As consumers shifted away from cash towards digital payments in 2020, the digital payment methods they chose became even more fragmented and localized. These four ecommerce trends give merchants insight into how to prepare for continued growth and changes in global markets.

For an In-Dept Exploration into this Topic, Watch The eCommerce of Everything, a Panel Discussion from the Singapore Fintech Festival

The eCommerce of Everything at SFF 2020

Four eCommerce Trends to Watch

1. The Payments Landscape Will Become More Complex

There’s no common denominator that is able to connect all payments across countries. Take the diversity across Asia as an example.

  • People in Indonesia pay with bank transfer and mobile wallet. In India, they do so with UPI payments.
  • And in other countries, like Singapore, they do so with local payment networks like PayNow.
  • Meanwhile, penetration of credit cards in Japan is high, with about 3.2 cards per person.

To dig a little deeper into that last example, nearly half of ecommerce in Japan is cash settled — through cash on delivery (COD) or conbini payments and bank transfers. Many in Japan are not unbanked. They’re uncarded and so a cash habit has persisted, despite the headwinds of the pandemic.

2. Payments Change Will Be Unevenly Distributed

While some in-country payment preferences seem resistant to change, elsewhere they are transforming too rapidly for online sellers to keep up. Take the revival of QR codes. Long a mainstay of the Chinese market, now Indian consumers have started to move towards QR to make payments to ‘mom and pop’ stores. While in Singapore, QR is now being accepted much more as consumers’ preferred QR choice.

In a world of omnichannel commerce, how consumers pay is constantly evolving — as is when they pay. Pine Labs, which covers about 95% of all pay later transactions in the offline world in India, recently revealed at the Singapore Fintech Festival’s eCommerce of Everything panel session that its volumes have actually grown by about 80% year-over-year just for pay later transactions. The company’s pay later transactions have grown in the rural markets of India, benefiting small merchants who are becoming more open to providing some credit to customers.

3. Marketplaces Will Be An Engine For Global eCommerce Growth

Marketplaces will remain a key pillar of the global commerce landscape in 2021. Online marketplaces are estimated to be responsible for more than 50 percent of ecommerce volume in Asia alone, thanks to sites such as Lazada, Zalora and local domestic marketplaces like Indonesia’s Bukalapak. Online marketplaces’ size and audience gives sellers immediate scale and very fast sales. In Southeast Asia, consumers compare between three and four product sources before they buy — so markets truly do offer sellers better prospects of being discoverable and relevant.

4. Consumers Will Lift Their Expectations for Checkout Experiences

The checkout experience will remain as the biggest challenge and opportunity in 2021. Businesses that can handle payments complexity without creating headaches for consumers at the checkout will be the ones who can reap more sales than their competitors. But that’s easier said than done. In Southeast Asia, cards are generally one of the least preferred ways to pay.

The ‘European’ or ‘American’ style checkout page, where consumers must provide a 16-digit number with the expiration date and CVV, remains a poor checkout experience. Knowing which checkout experience is best for a specific consumer, in a specific market, will remain a key advantage for ecommerce businesses everywhere.

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