Challenges and Opportunities for Online Payments in e-Commerce

Challenges and Opportunities for Online Payments in e-Commerce

Exclusively written for payxintl.com
by Jeff Bread

Like most activities, shopping has moved from a physical landscape to a digital one. The rise of e-commerce has steadily grown in the past few years, accelerated by the pandemic. As online shopping became the norm, the demand for online payments has also risen. In fact, Business Wire reports that the global digital payments market is projected to be worth $11.29 trillion (£8.37 billion) by 2026 given its current trajectory. The rapid success and widespread adoption of this technology, however, is not without its flaws. There are many challenges that online payments continue to face in e-commerce. Understanding what these are, along with possible opportunities, can help us assess their applicability now and in the future. Here are the challenges and opportunities of digital payments in the e-commerce industry:

The Challenges of Online Payments in E-Commerce

One of the most glaring issues that online payments face is fraud. Since these transactions occur digitally, they are more vulnerable to fraud and cyberattacks. Data from UK Finance found that more than half of the payments made before the pandemic were done using a card. This skyrocketed once COVID-19 hit, not to mention the proliferation of other methods like e-wallets, QR codes, and cryptocurrencies. That means there are even more opportunities for cybercriminals to target unsuspecting victims. These security challenges broaden even more when facilitating global transactions. Apart from cybersecurity threats, business owners have to figure out currency exchange and banking norms.

Selecting a payment gateway also becomes a challenge when accepting online payments. This is essential for the safe processing of online transactions from your website to your bank. Choosing the right gateway that will fit your business model and customer needs can be especially challenging. Businesses should also consider aspects such as integration, scalability, compliance, technical support, and fees. One can also expect additional charges, such as payment processing fees.

Opportunities for Online Payments in E-Commerce

Even though online payments can present challenges to e-commerce businesses, there are more opportunities to look forward to. Gone are the days when people had to rely on traditional payment setups like visiting the store or mailing a check to complete their transactions. With online payments, businesses no longer need to employ a cashier or deal with the costliness of processing payment slips. This translates into the reduced overhead and operational costs that come with the adoption of online payments.

Moreover, online transactions are helped along by popular e-commerce platforms like BigCommerce, Shopify, and WooCommerce, which come with their own payment systems. An AskMoney post on Shopify explains that the platform has a robust point of sale (POS) system, which supports online buyers and allows them to browse online and pick up orders in-store or from pick-up points. POS systems can also allow merchants to accept in-person payments instantly at markets, events, and more. Best of all, these systems enable sellers to see real-time store activity to analyse their business performance.

Overall, digital transformation has changed the way banks operate with e-commerce. As Alicia Edwards in her post for us explained, professionals can now improve their current systems and migrate them into the digital sphere, often as a centralised system. This speeds up internal processes and makes it much easier to store, navigate, and maintain data for better, safer transactions. So, yes, there may be risks in online payments as we know it. But it shouldn’t prevent us from taking advantage of the opportunities to mitigate those challenges.

Exclusively written for payxintl.com
by Jeff Bread