By: Jeremy Nicholds– Judopay, CEO,
The pandemic has had profound effects on the daily lives of both consumers and businesses. It would be rare to find anyone who has not started ordering groceries online or using contactless chip and PIN cards instead of cash. However, many of the changes we have had to make to adapt to a socially distanced world are not new, but the culmination of years of digitisation.
It is safe to say that eCommerce thrived in this environment. Overall the sector grew by a staggering 46% in 2020, its strongest growth for more than a decade, and while that growth seems to be levelling off as shoppers return to stores, there are going to be plenty of shoppers who found that they can get what they want easier and quite possibly cheaper through eCommerce. If you run an eCommerce operation then it is likely that you will have gained new regular customers during the past 18 months, and there will be a long-tail effect from the pandemic that will be felt for many years.
Of course, now is not the time for the eCommerce industry to rest on its laurels. If we are entering the end of a boom then we are also entering the start of a bust, and the right move now is to consolidate the gains you have made so that your company is better able to weather any coming downturns. With this in mind, let’s look at a few ways you can build on the trends that were accelerated by the pandemic.
Managing payment declines
More eCommerce has meant ‘digital debutantes’ who have never shopped online before turning to the internet for the first time. They are using sites like yours for the first time and if they have a negative experience, they have no qualms about going elsewhere. There are hundreds of ways to fail to live up to a customer’s expectations, but one of the most significant and least appreciated is false declines.
With the implementation of 3D Secure and a growing emphasis on fraud protection, it has never been safer to shop online. Unfortunately, legacy card processing companies are having trouble adjusting to a digital world and are declining payments that should be accepted. It is estimated that false declines cost merchants 75 times more than fraud, so clearly there needs to be a balance struck between security and acceptance. This is where newer, online-native card processors can be helpful, since their programmes are built for eCommerce rather than bricks and mortar and they understand that how internet users’ shop is often very different, and what can be classed as a red flag in ‘the real world’ often is par for the course online.
Alternative payments are mainstream in global eCommerce
If your preference is not to accept credit and debit cards then you will not want to hear that to stay competitive in eCommerce you should consider accepting more types of payments across devices – but there is a huge opportunity to expand your company’s marketplace if you can offer alternative payment methods.
eCommerce may have grown rapidly in the UK over the past year, but it’s rapid ascent is nowhere close to China’s – 44% in a single year. Russia and India also recorded incredible growth. As with other trends, this has been accelerated by the pandemic, but is really the result of long-term trends. All these countries have been developing economically, but more importantly for eCommerce companies, all have developed their own payment ecosystems outside of the familiar VISA/Mastercard duopoly.
To compete in a global market your eCommerce site will not just need to have rock-solid technology for accepting standard payments, but a new system that allows you to accept the kind of payments that your customers use. This is not to mention the potential that cryptocurrency has for digital commerce. Although bitcoin was for a brief period accepted in some online stores its use as a currency as opposed to an investment seems to be abating, though this does not mean that another coin will not take its place, and with several countries trialling their own digital currencies you may have to start accepting digital money sooner than you think.
The next wave of eCommerce
eCommerce has received a shot in the arm from the recent pandemic, but the bounce will not last long until it is business as usual. The challenge for eCommerce companies now is to build systems that address common problems like payment acceptance and bring in new customers from territories that have previously been underserved.