In 2025, retail e-commerce revenue is expected to exceed $4.8 billion worldwide. Over the last five years, the world has shifted
to digital: online shopping from retailers across borders is overtaking high-street shopping, and in the world of payments, contactless and BNPL (buy now, pay later) are increasingly catching up to traditional card or cash payments.
Today, the modern customer has more choice than ever before, and that choice is shaping the world of e-commerce payments. Merchants and issuers alike need to adapt to this new, agile, cross-border world in order to capture the potential of the e-commerce
growth we’re experiencing.
Finextra spoke to Moshe Winegarten, chief revenue officer at Ecommpay, to understand how consumer choice is shaping the payments landscape, and how merchants need to adapt in order to thrive in an e-commerce world without borders.
Spoilt for choice – optimising the checkout experience
One of the best ways to examine how consumer choice has shaped the market is by looking at checkout optimisation.
Statista found that 69% of online shopping carts were abandoned in the UK in Q3 of 2024. Referring to Ecommpay’s
own research, conducted during 2024 in association with IMRG, Winegarten states that once UK customers get to the checkout process, conversion still only reaches 58% on average.
“Our study found that, on average, checkout abandonment occurs at nearly 90% of the typical length of time it takes to complete a payment,” Winegarten explained. “When a customer has taken time to input their data and abandons the purchase at such a late
stage, there is clearly a significant barrier that must be addressed.”
Some of the reasons for cart abandonment identified include:
- Unexpected costs, such as high shipping fees or taxes appearing late in the checkout process.
- A complex checkout process, including complicated forms, multiple steps, or forced account creation.
- Limited or lack of suitable or familiar payment options.
- Concerns about security.
- Slow website speed and a sluggish checkout experience.
- High shipping costs or long delivery times.
- A change of mind or losing interest before finalising at checkout.
Checkout complexity is one of the main factors influencing drop-off. The research additionally found that 59% of orders come from guest customers, showcasing that many shoppers prefer not to register with a retailer when making a purchase.
Another crucial aspect is payment methods. “Credit and debit cards remain the most common payment method, but only account for half of all e-commerce revenue for the businesses surveyed. The other 50% of revenue is split across a range of alternative payment
methods, including BNPL solutions and e-wallets,” Winegarten commented.
Seeing this equal split between traditional and alternative payment methods means that providing a range of payment options should be high on the list of priorities for e-commerce businesses looking to improve conversions. Another priority should be offering
express checkouts.
Winegarten emphasised: “Breaking down conversions based on the number of express checkout options provided shows that the wider the range of options available, the greater the conversion rate. Merchants not offering express checkout report 52% conversions,
which increase steadily with the addition of each express option, reaching 67% for those providing access to four express checkout options.”
Avoiding IBAN payments discrimination in a cross-border world
As more and more e-commerce happens across borders, facilitating streamlined payments becomes crucial to success. “Half of merchants who sell internationally provide localised payment options for customers based overseas, which could significantly impact
cross-border conversions,” Winegarten explained. “Based on feedback from our clients, we know that a dynamic checkout that presents relevant payment methods for where the customer is located can improve conversion rates, while currency choice boosts conversion
and approval.”
However, in Europe one concern remains: IBAN discrimination. In 2024, the European Commission’s Mairead McGuinness
commented in a meeting of EU payment officials: “Nine years after the deadline for SEPA implementation, there are still companies and public administrations refusing to make or receive euro payments involving non-domestic accounts.”
In the case of open banking, it means that instant payments either cannot be initiated to a bank account from a different member state, or that banks create discriminatory, unnecessary steps which discourage the user and lead to high rates of abandoned or
cancelled payments.
IBAN discrimination affects people across the EU on a daily basis. It also affects businesses, preventing companies from scaling across the EU, as they are unable to pay their suppliers or receive payments from their customers. “For merchants, the refusal
of non-domestic IBANs can lead to lost sales and diminished customer trust,” Winegarten explained. “For payment providers, IBAN discrimination disrupts the promise of a unified payments market, creating unnecessary friction in payment journeys.”
Open banking enables businesses to streamline their payments offering, and open banking virtual accounts help minimise the risk of discrimination by settling to local IBANs.
Technical considerations for merchants
Open banking should be considered as a payment method integrated within the full payment stack. Winegarten emphasised that open banking providers should consider their business model carefully, because “the economics for directly selling open banking as
a standalone payment solution are very challenging. The vast majority of merchants will offer open banking payments via their main PSP.”
Yet onboarding, integrating, and managing every payment method and currency in-house comes with complex technical considerations and is unsustainable for many merchants. Working with PSPs can help alleviate those pressures because it allows businesses to
add and offer a wider range of payment and express checkout options without increasing resource requirements or website complexity.
“If one provider can deliver a range of solutions via a single integration, it removes the need for a multitude of partnerships,” Winegarten outlined. “Open banking, subscriptions, payment orchestration, global payments, express checkout, and alternative
payment methods can all be offered via one partnership, one integration, one account to manage. This also provides the e-commerce business with the capability to scale globally with access to a huge range of payment methods, while also benefiting from increased
authorisation rates and drastically decreased transaction costs.”
Yet Winegarten also warned against the assumption that one payment platform for all customer transactions – physical and digital (omnichannel) – is the holy grail for every merchant. “Being able to serve customers seamlessly across all channels and providing
a wide range of payment options remains essential. Using one provider to deliver multiple payment types across every one of these channels may not be in the best interests of the merchant or their customers.”
For merchants, the priority must remain in providing the best service to their customers, which means they must be able to identify customers across channels. Many payment providers began life as a single-channel provider, meaning that solutions have been
tacked on as and when customer demand required it, leaving many elements of their offering very basic.
“Many merchants believe that using a single payment provider is the only way to achieve seamless payments and a good customer journey,” Winegarten summarised. “However, this approach leaves customers at a disadvantage, having to deal with rudimentary payment
solutions.”
What can we expect from e-commerce payments in 2025?
In 2024, we’ve seen a lot of traction gained by open banking, BNPL, and marketplaces. “Open banking is still growing despite challenges with pricing and a push for profitability,” Winegarten summarised. “And BNPL may have come into its own during Covid,
but is now settling into a new space, including longer-term lending and responsible finance to ensure longevity. We are also seeing more merchants sell through marketplaces, and even the larger providers developing payment solutions specifically targeting
currently underserved marketplaces.”
Enabled by innovations in tech, e-commerce payments are being simplified, streamlined, and secured better than ever before. This also allows more one-click payment options to emerge from both e-commerce platforms as well as PSPs. Exciting developments shaping
the market can be seen by companies like Mastercard, confirming their commitment to tokenize
card payments by 2027, which helps increase security, convenience, and – ultimately – conversion.
Lastly, we can expect a continued push towards cross-border in 2025. “Exciting things can be seen in the continued growth of globalisation, with merchants servicing beyond their borders. We are seeing more and more demand outside of Europe for UK merchants,
particularly in the Middle East and most recently in Africa,” Winegarten concluded.