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As we are entering 2022, the world is still overcoming the pandemic, and Covid-19’s influence on business has been felt all across the globe. Consumers have adapted to the limitations, their purchasing patterns and methods have altered, forcing businesses to be creative in order to survive. In this blog, we explore at how the Covid-19 pandemic has affected payment processing trends and the impact it has had on retailers and payment service providers.
Covid-19 has transformed the way people purchase, how businesses sell and deliver products and services, and how payment service providers help businesses. Let’s look at the top payment processing trends we’ve witnessed as a result of Covid-19’s impact.
Convenience … A key indicator behind the wider eCommerce adoption
Increased online buying and higher use of eCommerce have been the most significant changes in consumer behavior. During the pandemic, the eCommerce market has exploded. Customers are increasingly preferring to make purchases online, with an increase of up to 20%. Of course, the number varies by region, but this is the general growth we have seen all throughout 2020 and 2021. There is no doubt that eCommerce would have continued to rise year after year regardless of the pandemic, however, the growth we are witnessing is quite aggressive.
Interestingly, the adoption of eCommerce isn’t just influenced by government mandates or in direct response to the number of businesses that have had to close their physical locations. Consumers are increasingly making online purchases rather than going in-store at businesses that are considered essential and not affected by government restrictions. Many consumers are hesitant to leave their homes, advised to isolate, or simply prefer this newly discovered convenience.
With this surge in internet purchasing, people that were previously unwilling to utilize it are becoming more comfortable with it. Many people have been pushed or motivated to rethink their attitudes about eCommerce and online buying as a result of the pandemic.
Although we can’t say for sure what the long-term impact will be, many of the payment processing trends we’ve seen throughout the pandemic will undoubtedly continue post-Covid.
Increased Fraud … Payment processing has become riskier.
As a result of the growing popularity of eCommerce and online shopping, we’ve seen an increased risk to businesses. Customer behavior, as well as new fraudster techniques and volume, all have an impact on this.
There has definitely been an upsurge in fraudulent behavior in tandem with the rise in consumers purchasing online and in card-not-present environments. Even in countries that have embraced the EMV standard, online shopping is still less secure than in-store purchases. As a result, online shopping still carries a bigger risk.
Chargebacks are on the rise.
Chargebacks have also increased at an exponential rate. There are of course legitimate chargebacks such as those in the tourism business where many customers unable to fly or stay in hotels had no other option than to chargeback. However, there has also been a huge increase in unauthorized chargebacks also known as friendly fraud. Poor financial situation as a result of the pandemic is one of the causes. Fraudsters are finding creative methods to play the system by purchasing something, using it, but without paying for it. Many people have learned that they can do this without being penalized, which leads to people repeating the process with different items and services.
It is more likely that the same people who do these types of chargebacks, are repeat offenders. It might start with a more genuine chargeback, such as getting paid for a defective goods or a service that didn’t meet expectations, and then turn into a habit — it’s a slippery slope with consumers abusing the system because of its flaws.
In conclusion.
Because of the shift in customer behavior discussed earlier, there is a greater need for digital services to be available to merchants. As a result, these merchants are seeking more from their payment service providers, including online payment gateway services, a variety of payment acceptance methods, and improved payment data and reporting. Some companies are better at adjusting to these new problems and reacting faster than others. Payment service providers and the payment industry must adapt to new payment processing trends to survive and thrive.
Without a doubt, the impact of ongoing changes in customer behavior and payment trends will echo post-pandemic. Payment processors and merchants who adapt to these new needs and purchasing patterns will prosper in the new normal.
The move to online payments will only accelerate, so businesses must embrace it and adapt their procedures to comply, as well as provide customers with more convenient options to complete transactions. Companies that did not previously have an online
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If you want to learn more about eCommerce and payment processing trends, please get in touch with us or head over to our Empyrean eCommerce page to learn how you can take your business online in a few quick steps.
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