The effect of fintech on global e-commerce

Global payments options have evolved over the years, and the rise of new payment methods, including online and mobile payments, has been the effect of more online and mobile e-commerce. Now, the ability to move money safely across international borders, and the ability to shop anywhere in the world at the click of a mouse, has had a major effect on where a business operates.

Digital money and payments are growing

Digital commerce has caught the consumer’s attention, and the increase in mobile wallets, purchases on apps, and peer-to-peer transfers are the result. The mobile wallets and apps that can be used online are fast replacing the traditional methods such as checks and payment on delivery. The Internet and mobile transactions have become seamless and easier for the consumer, increasing their need to shop online. Global retail sales are now expected to double by the year 2020, to an estimated 4 trillion US dollars, excluding online sales of tickets and travel packages.

Global trade drives the technological advancements

More e-commerce platforms are coming to the fore, with international platforms like Shopify and Magento bringing down the barriers to international transactions. Moreover, the glut of payment platforms on the market – PayPal, Stripe, Square, etc – are opening new revenue sources for e-commerce traders, and giving new businesses a chance to compete in what was a niche market. Worldwide economic trade has driven advancements in technology to new levels and allowed even the smallest business on platforms like eBay to succeed. With the inevitable evolution of e-commerce around the world, and the growth of internet coverage in almost every country, how consumers pay for their goods has also had to evolve. Consumers want to be able to buy anything they like, from anywhere in the world, and do it fast, effective, and simple.

Global payment options need to accommodate the local market

Around the world, payment methods and legal frameworks vary greatly, and while many of the payment options may appear similar on the surface, underneath they are vastly different. This has caused major problems for global companies like Facebook, Microsoft, Google, and Apple, who are faced with trying to deploy their services on old, obsolete infrastructures that are not compatible with their modern systems. As consumers in the new, emerging markets in Asia and South America increase, their own payment preferences vary between countries, and some still prefer things like bank transfers and voucher-based payments. Expansion into these fast-growing markets means companies are faced with the problem of adding hundreds of different payment options to their own platforms to accommodate the new market or risk losing over 80 percent of the market’s potential consumers who do not have access to international credit cards.

New payment companies are paving the way

While this is a major challenge faced by the companies offering global services, technology from companies that have influence over the payment arena have risen phenomenally quickly. Apple Pay, PayPal, and Google Pay have already been discussed on many occasions, and are the main players in the markets. However, newer companies such as Stripe are rising quickly through the ranks, and deserve to be heaped with praise for their efforts in bringing global commerce to developing nations. AS do companies such as Payoneer, the global payments service, and BlueSnap, Dwolla, and Skrill, the newest of the modern payment gateways. These new companies are giving rise to a new breed of business, the e-commerce gateway. Content companies, marketplaces, and advertising networks are now all using their API-based payment options, which are globally capable and are already optimized for mobile devices.

Collaboration is the key to integration

With the emerging markets in developing countries being so varied, the e-commerce companies are already beginning to collaborate with the market’s own payment solutions companies. These local companies normally have deep-seated roots in the local economy, and cover the complete range of locally preferred payment options. Companies who partner with local providers first need to ensure that the partner company has a good understanding of the local banking system, a solid platform that has a proven technological base, and a good grasp of the local laws, with the capacity to operate within local compliance guidelines and avoid fraud issues.

Merchants can rise to the challenge to be on top

Technology is expanding in the digital banking arena to allow global payments that meet the wants and needs of the local consumer. Merchants who rise to the challenge and are able to overcome the various problems of international integration will be the ones to gain the strongest global foothold in the developing markets. However, governments also need to play their roles in accommodating cross-border transactions by encouraging the use of digital payments, much as India has already done with their move to a cashless society.

Forward thinking payment options are ahead

Mobile checkouts are expected to grow and improve to increase the availability of payment apps that can improve customer loyalty and customer interaction. Multi-currency credit and debit cards are also expected to be more widely available in developing countries, as well as allowing a larger percentage of the populations of those countries to have access to them. Customer loyalty is one of the most important aspects of commerce, and in order to fully secure it in the consumers, the companies need to integrate more useful features into their website interfaces and mobile apps. Microsoft, Google and Apple have already announced their plans to introduce “in-browser” payment options, while Facebook is expected to follow suit by offering more e-commerce platforms, international payment options, and global money transfers in their apps.

Wherever in the world, the consumer may be, e-commerce is getting ready for the rise of the true global market, and fintech is the technological advancement it has been waiting for.

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