For the ever-evolving e-commerce landscape, online payment methods are pivotal elements, facilitating seamless and efficient transactions. In 2022, the e-commerce sector experienced its most significant expansion in the last decade, surging by 19% to reach $4.6 trillion. This growth represents nearly three years of normal progress condensed into just one year.
And projections suggest that by 2024, e-commerce is set to increase by an additional 60%. This growth will be primarily fuelled by mobile commerce via applications and social media platforms, potentially reaching a global total of around $7.3 trillion.
The variety of online payment options available today is a testament to technological advancement and the growing needs of a global market.
Read on for everything you need to know about online payment methods and their significance in the e-commerce industry, as well as the trends set to dominate next year.
What are online payment methods?
Online payment methods are electronic systems that enable individuals and businesses to transfer funds via the Internet. They encompass various technologies and mediums, allowing immediate transactions across different platforms.
A classic example is using a credit card for purchasing goods online. When customers enter their credit card details on a website, they are encrypted and sent through a secure payment gateway. The transaction is then authenticated, and funds are transferred from the buyer’s account to the seller’s account, all within a matter of seconds.
What are the types of online payments?
Several types of online payment methods cater to diverse consumer preferences and technological advancements, most notably:
Credit and debit Cards
The most common form, widely accepted across various e-commerce websites.
Digital wallets
Solutions like Apple Pay and Google Pay offer convenience, eliminating the need to enter payment details for each transaction.
Mobile payments
This method allows users to make payments using their smartphones, often through tapping the device on a contactless terminal.
Bank transfers
involve the direct movement of money from one bank account to another online.
Buy now, pay later services
These services enable customers to make purchases and pay for them in instalments, offering greater flexibility.
Benefits of online payment methods
Here are the three most common benefits of enabling online payment methods for your growing business:
Convenience
The ability for your customers to make payments from anywhere with an Internet connection has revolutionised the shopping experience.
Security
Advanced encryption and security measures protect both customers and businesses from fraud.
Global reach
By incorporating various payment methods, businesses can cater to regional preferences, expanding their consumer base globally.
Popular online payment methods in 2024
In 2024, online payment methods will continue to evolve, reflecting the dynamics between technology, consumer preferences, and economic trends.
Here are our predictions for the most popular online payment methods of the year. From established players to emerging technologies, these methods reshape how consumers and businesses engage in online financial transactions:
Mobile payments vs traditional cards
In 2024, the landscape of online payment methods will continue to evolve, supported by statistics on digital wallets and mobile payments gaining significant traction, with market shares expanding rapidly.
Looking back to 2022, approximately 50% of all global e-commerce payment transactions were conducted through mobile wallets, establishing them as the most widely used online payment method worldwide.
Predictions indicate that this dominance will grow, with mobile wallets expected to account for over 54% of the market by 2026. Meanwhile, while credit cards held a 20% market share in 2021, they are forecasted to decrease usage in the upcoming years.
Traditional methods like credit and debit cards are increasingly complemented by innovative solutions like biometric payments and blockchain-based transactions. These trends reflect a move towards greater convenience, security, and global accessibility.
Social commerce
This online commerce method harnesses the power of social networks to facilitate transactions, creating a seamless shopping experience directly within social media platforms. The growth of social commerce is propelled by the increasing number of social media users and their desire for convenient, accessible shopping experiences.
Globally, social commerce produced revenues of approximately $728 billion in 2022 and is anticipated to grow at a compound annual growth rate (CAGR) of 31.6% between 2023 and 2030.
Alternative payment methods (APMs)
Driven by the growing demand for more flexible and diverse payment options, APMs, which include digital wallets, bank transfers, mobile payments, and Buy Now, Pay Later schemes, cater to a wider range of consumer preferences.
The payments market is seeing a 42% increase in global cashless payment volumes, of which APMs account for a large proportion. This shift is largely attributed to the rising emphasis on convenience, security, and payment speed, alongside the growing inclination towards mobile commerce and e-commerce.
The suite of online payment methods is constantly evolving, reflecting the dynamic nature of eCommerce. The landscape in 2024 offers unparalleled convenience and security due to the ubiquity of credit and debit cards, as well as the rise of digital wallets and mobile payments. Through these innovations, businesses and consumers can bridge the gap between them.
Our platform supports multiple online payment methods, and we invite businesses to explore these opportunities and enhance their transactional capabilities. Our payment solutions are secure and easy to use, making them the perfect choice for businesses of all sizes. We also provide a wide range of support services to help businesses make the change.
Make online payments easy with Trust Payments! Contact us for future-proof, seamless solutions to stay ahead of your competition.
