The purchase of goods and services is increasingly shifting to digital sales channels. Both retailers and shoppers expect the most diverse, frictionless payment options possible. Challenges and opportunities lie side by side here, because those who master the often complex processes can profit greatly from the boom in e-commerce payments.
The distribution and purchase of goods and services via the Internet has shifted the business processes of stationary retail to digital sales channels. Both B2C and B2B transactions are affected. This process of change has progressed more and more in recent years, and the total sales volume of e-commerce retailers is continuously increasing.
In the course of the ever-increasing importance of e-commerce, the demands on payments processes are also rising. After all, only when customers successfully complete the checkout process with the payment method of their choice are goods delivered or services provided.
The requirements for e-commerce payments are significantly more complex than for stationary retail. The reasons include, in particular, a greater potential for fraud, caused by the greater anonymity, as well as the large number of possible payment methods with different technical processes. Important influencing factors are the respective customer preferences and a checkout process that is as short and intuitive as possible.
Since 2021, an additional hurdle exists in the checkout process: the Payment Services Directive 2 (PSD2) with the obligation for strong customer authentication (SCA) regulated therein. This means that customers have to authenticate themselves via their bank when making e-commerce payments. The SCA obligation is only waived in exceptional situations, such as a low-value exemption, a one-leg-out or a MOTO transaction. SCA is thus an additional step in the checkout process with the inherent risk of aborting the purchase process.
Card-based payment methods are highly relevant and have gained additional popularity through wallet solutions, for example from Apple or Google. In addition, payment methods such as PayPal or Klarna are dominant in Germany and Europe. Another trend in e-commerce are so-called buy now, pay later (BNPL) offers. BNPL payments offer the customer a high degree of flexibility with regard to the time of payment, which can be well into the future; instalment payments are also often possible. Such a procedure is also attractive for retailers, as the BNPL provider usually assumes the claim and thus the default risk.
In addition to the described trends in e-commerce payments, a consolidation of payment service providers will take place in digital retail – analogous to stationary retail. The reasons for this are increasing competitive pressure, falling margins and rising customer needs. Despite consolidation, however, the range of payment methods will continue to expand, and in particular instant payments will become more relevant, for example through Request to Pay (RTP).