Payment processing trends

Global online trade sales figures have consistently increased with 19% each year and Payment Solution Providers, Card Processors, Acquiring Banks and web Merchants within the various industries are profiting from cross-border ecommerce, resulting in international expansion into foreign markets. Consumers worldwide are presented with a variety of mobile card payment processing methods. Technological innovation and mobile payment trends are boosting the adoption of m-commerce, expected to outpace ecommerce from stand-alone PCs and Laptops, within the next years. By 2014, 580 million online shoppers will pay for purchase products and services from their smartphones and/or tablets.

 

Even thought innovative alternative payment methods quickly gain in popularity in the developing, emerging and mature markets, credit cards globally remain preferred method to pay for ecommerce transactions. Card-not-Present (CNP) payments are accepted worldwide and can be paid from multiple devices. Financial institutions have acquired decades of expertise in credit card processing and in the adaption of their business processes to new compliance laws and changing legislation.

 

One industry which has benefited enormously from cross-border ecommerce is the Retail Industry. Consumers compare prices of books, clothes and consumer electronics and buy them from the web shop with the best offer, including speedy delivery at low cost. As one of the fastest growing emerging markets, China’s online retail market is expected to triple over the next three years, in part driven by social media platforms, frequented by millions each day. E-shoppers discuss products and services online, on internet forums and blog sites. A digitalized generation of consumers expects to be serviced via multiple channels, at any time, any place, anywhere. The retail sector needs to follow social media trends by transforming and adapting its business strategy from mono-channel, to multi-channel, to omni-channel marketing.

Payment Processing Trends

 

The growing online Travel industry consists of leisure and business travelers who plan, book and pay their trips online. Leisure and business travelers alike, share travel experiences on social media platforms and blog sites, where User Generated Content (UGC) has become one of the key drivers in a growing online travel industry. In the years to come, over 33% of all travel & tourism trips will be planned and purchased online, more than often on mobile devices, such as smartphones and tablets.

 

Travelers will follow trends and search for special deals and all-inclusive hotel arrangements. This will contribute to the growth of cross-border ecommerce, as it offers consumers ways to spend less, by purchasing traveling services from foreign web shops outside their own region.

 

The online gaming industry is developing rapidly, with the number of smartphone and tablet gamers in the USA, passing the 100 million mark in 2012. New games are emerging and social casino games which combine gambling elements (without cash-out) are becoming increasingly profitable through (Free-to-Play) F2P business models, in which revenues are obtained from advertisements and/or from sales of virtual goods. These games are being played on multiple devices and are paid online via credit cards. Where games used to be sold as products, they are sold as services. Online games are played by gamers worldwide, their payments need to be processed in the different regions, and as can therefore be considered as cross-border ecommerce.

 

Similar trends are seen in the Software industry (SaaS) and in the Music Industry. Musical products (LPs, Singles and CDs) first transformed into downloadable files, obtained illegally, but as more countries apply stringent legal measures to counter digital music piracy, emerging legal subscription-based digital music service providers can profit from music products as a service, often paid with credit cards. Online transactions have to be routed to a secure payment gateway by PSPs or ISOs, processing credit card payments to acquiring banks in the different regions.

 

Independent of the industry, online merchants will profit from international expansion through cross-border ecommerce, if they connect to a global acquirer with partners in the different regions, experts in all the aspects of international payment processing, including international law and local legislation. A global network in which stakeholders carefully define responsibilities, risk can be mitigated while profit through exciting business opportunities in emerging markets can be shared.