E-commerce payment trends that are sizzling hot in 2021

The coronavirus pandemic has radically transformed our way of life. It affected almost all aspects but especially stimulated the development of e-commerce. The Visa Back to Business Study reports that contactless payments have become a driving differentiator: if all other factors were equal (price, selection and location), nearly two-thirds (63%) of consumers would switch to a new business that installed contactless payment options.

Businesses and consumers became so used to the new format of conducting financial transactions that they're unlikely to abandon it even in the ‘post-COVID’ era.

Let’s dig a bit deeper into TOP 4 e-commerce payment trends that we observe in 2021. 

1. Mobile payments growth

According to the British resource LearnBonds, the global mobile payment market size will set a record of $6.7 trillion by 2023. The share of Europe in it is estimated at $1 trillion. 

Moreover, Swedish investment company Finanso predicts a significant growth of mobile POS payments. Over the past three years, the volume of such transactions has grown 2.5 times, from $17.4 million in 2017 to more than $48 million in 2020. Experts predict this amount to exceed $111.4 million by 2023.

2. Google Pay and Apple Pay growth 

In 2018, the number of contactless payments globally increased by 72% and reached 70 billion transactions. Thus, contactless payments accounted for 15% of the total volume of card payments worldwide. This rate is expected to increase significantly over the next few years under the impact of the COVID-19 pandemic. Today, the total volume of contactless payments is $2 trillion. Juniper Research predicts this figure will reach $6 trillion by 2024.

Nowadays, the contactless payments industry is represented mainly by Google Pay, Apple Pay, and Samsung Pay. Of course, the rapidly growing popularity of contactless payments is driving competition among corporations. Apple Pay now handles 43% of all contactless payments and has the largest market share. Google Pay accounts for 31%, and Samsung Pay for 20%.

Besides convenience, here are some more advantages of making contactless payments: 

• Speed. Contactless payment takes a few seconds and can be made in one touch.

• Safety. If your physical credit card gets stolen, fraudsters have all the data to make purchases (if you don't have additional protection). But in case your phone gets stolen, no fraudster would be able to pay with it without identification via Face ID, Touch ID, or a password.

3. One-click payments or tokenisation

This technology saves the data a user enters on a checkout page making the first purchase. During all further purchases in the same store, the payment data is filled in automatically. A payment system encrypts the customer's card data into a token — a buyer's card identifier. Buyers can make a one-click payment if they previously paid on this website with the same bank card.

Thus, card tokenisation replaces confidential bank card data with a unique token that allows you to pay for purchases online without repeatedly entering your card details. Tokens are absolutely safe to use and cannot be decrypted by fraudsters. Their main advantage is that you can automatically pay on any website without giving it direct access to your card details.

According to the Assist group of companies research, online stores and services increase their revenue by an average of 20% by providing a one-click payment option for their customers.

4. The growth of online payments amid COVID-19

On the one hand, the COVID-19 pandemic caused a record rise in online payments worldwide. On the other hand, online payment revenues declined as people began to spend money more rationally out of fear of impending crisis. According to McKinsey, global payments revenues in 2020 decreased by 7%, or $140 billion, compared to 2019. At the same time, during the first six months of 2020, consumers spent 30% more on online purchases in US retail stores than over the same period of 2019. Online commerce nearly doubled in the second half of 2020, according to Amazon.

The fear of contracting COVID-19 through physical money and sometimes even the refusal of sellers to accept cash made people use electronic payment methods to pay for goods and services more actively. In 2020, the pace of technological change, including electronic payments, increased 4-5 times compared to previous years. 

The trends listed above indicate the global move from cards to truly digital payments methods that may still rely heavily on card accounts but do not require entering card details for payment