Online spending in 2020 increased exponentially. US Online retailers enjoyed a bumper year, with around $861billion spent.
Retailers are improving the customer experience. Increasing delivery speed, reducing delivery costs, and offering more payment options than ever.
Making online shopping even more popular, as it is just so easy.
Part of making the experience easier is offering a wide range of payment options.
Some of the most common online payment options you will see are:
- Afterpay
- Klarna
- PayPal
- Payoneer
- Stripe
- World Pay
- Visa/Mastercard
Online payments are also fast and more efficient now. Creating online accounts with your favorite retailers and saving your payment details makes shopping quick and easy.
You can pay instantly now, or you can usually expect your goods within a few days or as little as a few hours.
It is a great system that has improved the lives of many.
The first online payment system
In 1994 Standford Federal Credit Union was established and was the first financial institution to offer internet banking.
The original online payment systems were not user-friendly, though. ECash and CyberCoin were both made available in 1996. These were cash alternatives, like e-money, tokens, or digital cash.
A fun fact is that Pizza Hut accepted online food orders in 1994! 1994 was also the year an online shopping titan was founded, Amazon.
To be able to pay online in previous years, you would need specialized software and hardware.
Now, the payment options are as little as two steps.
The technological landscape and online payments
Online payments and in-person purchases are now as one. For example, you can use your mobile phone to pay for goods in a brick-and-mortar store.
People can open bank accounts based entirely online, pay for a take-out meal and pick it up within an hour.
Social networks and gaming have grown in unison with the online payment market. There are now 1,55 billion monthly active users on Facebook, and that rises daily.
Many of these are business users who spend on advertising. A large portion is gamers who play inbuilt games or share their game progress on social media too.
Online gaming sites, from MMOs and DOTAs to games like Farmville and poker games, use the latest payment technology too.
Improvement of the systems allows for a better player experience in the case of gaming.
Of course, if you’re playing at online casino real money no deposit, it is vital that the operator offers a range of payment methods in order to convince the player to spend their own money once the registration bonus has ended.
The best way to do that is by offering as many payment methods as possible, making life easy for the player.
In 2020 there were 2.7 billion online gamers; in 3 months, reports suggest that gamers spend an average of $123 USD.
With that massive figure in mind, it is no wonder that gaming retailers have adopted a range of payment methods, including game time cards.
What are the top online payment methods used?
As technology advances, so do people’s preference for specific ways to pay for online goods.
Customers don’t all use PayPal or Apple Pay, and while they are some of the most popular payment options, not everyone has access to them.
To create the most seamless experience for the customer, retailers and game sites began to offer more payment options.
This inclusivity allows people to have more control over their payment options. Thus feeling even happier and more invested in their shopping opinions.
So what are the most popular online payment options?
- PayPal has a massive 254 million users worldwide and is one of the fastest methods of payment.
- Google Pay is popular as users have their cards saved to their accounts, making this payment method fast and easy.
- American Express, offering fraud protection and accepting over 120 currencies, making it a hit with retailers.
- Apple Pay is used by more than 64% of people in the US, and a rising number across the globe. Apple Pay uses tokenization technology to protect credit card information; it is free to use and takes a second to pay.
You will also find Stripe, Visa Checkout, and other options too.
Which payment methods are the most popular?
- Digital or mobile wallet
- Credit Card
- Debit Card
- Bank Transfer
- Deferred card payment or charge
- Cash on delivery (like food orders)
- BNPL/ buy now pay later (Klarna, AfterPay, and other ways to pay later for goods received now)
Are there any issues with online purchases?
Security and technology improve at a rapid rate to keep online payments secure. There are still a few issues that can be faced by retailers and customers.
- Some customers don’t want to create an account, and when forced to do so, they will often abandon the cart and buy elsewhere.
- Website and payment portals can load slowly, cause shoppers to leave.
- Scam and phishing websites that look real.
- Hidden T&Cs that sign people up to direct debits or subscriptions.
Online shoppers are at risk when using unsecured wifi networks and not taking the correct precautions.
Following the correct online shopping safety protocols will keep shoppers safe.
Read more about internet safety in our post: Ways To Stay Safe While Shopping Online.
What does the future look like for online payment?
With the boom of online shopping in 2020, it is expected that more people will start using mobile digital wallets.
Although mobile digital wallets might sound a bit jargony, here are some familiar names and some you may already use.
- iDEAL
- PayPal
- NETELLER
- Skrill
- Apple Pay
Mobile wallets offer the customer ease of use, balance alerts, purchase speed and are all customer-focused.
Rewards for online payments and the introduction or improvement of reward cards and cashback options. Vision Critical reported that highly engaged customers buy 90% more often and pay 60% more per transaction.
An increase in voice-command purchases. Apple, Amazon, and Google smart home technology are occupying more and more homes.
Aside from being able to choose music or ask for facts, the AI is getting smarter.
Voice recognition is improving, and it is estimated by the end of 2021, there will be 1.83 billion homes with voice-enabled devices.
With these devices linked to online accounts and online accounts connected to our mobile wallets – a voice purchase would be efficient.
People are currently using voice-command to make purchases like household items, clothing, music, and movies.
We may see a potential rise in using this technology to make business purchases, larger items like furniture, and even in-game items.
The future of online purchases is exciting, and customers should enjoy a streamlined and fuss-free online payment experience!