2016 has just begun, but changes are afoot, large and small, for online payments, according to Digital River’s Eric Christensen, EVP of the company’s product management operations for commercial transactions.
The best technologies are ones that are widely used but are not necessarily noticeable. That’s especially true in the case of payments, where the exchange of money, using the Internet, has been evolving in ways small and large.
As a new year begins, it makes sense to look at what might lie ahead over the near term for online payments and specifically for commercial transactions. According to Eric Christensen, associate vice president of product management at Digital River, commercial transactions “will be smaller, more frequent and made with less effort and friction than ever before.”
The trend is “not a seismic shift but rather a quiet revolution,” Christensen told PYMNTS, and it is a trend that can broken down into several subsets.
First, keep an eye out for what could turn out to be known as the “pay button wars,” said Christensen, who added that the industry itself is fragmented and merchants are able to offer their own iterations of this payment technology, through PayPal, Apple Pay and other marquee names, to stimulate both brand awareness and customer loyalty. “The stakes are high for these contactless payment technologies,” noted Christensen.
Cashless P2P payments could also see rapid adoption this year, surmised Christensen, with adoption into the mainstream and P2P facilitated through the use of smartphones in order to send money between friends. One key catalyst, according to Christensen: “If one of the major phone manufacturers embeds P2P payments into their text messaging app, it suddenly will be second nature to say ‘Text me the money.’”
One bit of unfinished business, as Christensen noted, lies within the fact that online shopping cart abandonment rates continue to grow on a percentage basis year over year. That’s a challenge but also an opportunity, said the executive, as eCommerce financing offers a way to overcome some of the causes of abandonment. Eventually, he said, “online merchants, small and large, will be able to adopt financing options as an inexpensive eCheckout option as easily as accepting credit cards.”
The benefits here, he continued, “are clear and numerous. They receive the funds up front, even if shoppers only partially pay their tabs.” Moreover, consumers develop a relationship with financial institutions. Numbers bear out the benefits of eCommerce financing, said Christensen, as some merchants adopting the technology have seen conversion rates rise by one-third and other merchants have seen order values grow by 15 percent. On the consumer side, roughly half of those who opted to finance their online purchases said they had spent more during their transactions as a result.
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