The rise of online payment providers
The following is a guest post by John Rampton, founder and CEO, Due.
When you see a rise in the number of companies in any industry, you can be sure it is tied to the incredible opportunity that is present in that environment.
Companies rush to be part of industries that show strong growth, and online commerce and transactions, including the mobile space, is a prime example of sustained opportunity with room for many companies to succeed.
Here are some of the factors that have led to the rise of online payment providers who want to help eCommerce companies be able to serve all their customers with secure, convenient, and compliant payment processes:
Omnichannel strategies have increased based on strong demand from customers to be able to access and pay for their goods and services from whatever platform they desire.
This has pushed more companies to realize the need to establish multiple channels in order to satisfy their customers, including an online store, an offline presence, and mobile accessibility all linked together.
More opportunities now exist to serve customers across geographical borders due to the open marketplaces that now allow more consumers and businesses to buy from brands in other countries.
New payment technologies make it easier to do transactions that involve multiple currencies while logistics companies have facilitated delivery of these goods in a much more efficient and cost-effective way.
The need for more solutions that respond to key payment industry issues has also led to the emergence of more online payment providers.
The ability to develop much-needed solutions has been targeted as a way to gain a competitive advantage in what is becoming an increasingly crowded space. This includes providing solutions related to the growing complexity in the regulatory framework associated with online payments, including PCI compliance.
There is now a segment of the online payments industry dedicated to regtech solutions to further what’s possible.
Other areas include security solutions related to the rise in online payment providers who are seeking ways to protect their customers’ data and their own businesses from the rapid increase in fraud associated with online and mobile payments.
More online payment companies are appearing that are replete with more comprehensive security tools to propel the industry even farther ahead.
Social changes have also driven the rise of the online payment providers. Millennials are leading this fundamental shift in philosophies about how to pay for their goods and services, moving away from cash and toward digital wallets, eCash, eChecks and peer-to-peer payments.
They also prefer online banking and automated payments for their bills and expenses. Other demographics have followed suit in adopting these practices, pushing even traditional financial institutions to join the ranks of online payment providers.
New entrants to the online payment industry are offering up futuristic technologies like cryptocurrency as an alternative to traditional currency for online payments.
This includes the use of blockchain technology that not only enables digital currency transactions to work, but it also offers the potential for greater security solutions for other types of payments and even non-financial applications.
Other technology trends are opening up the doors to online payments, including the growth in the Internet of Things (IoT) devices, which are being used to essentially network our personal and professional lives.
In offering connected cars and homes, the need for adding online payments to the network is a must in order to activate certain features.
Offerings like having a refrigerator or personal home assistant place orders on our behalf for products that have been depleted or to handle other types of purchases we have approved them to make on our behalf.
Lastly, the data that is available for use related to purchase behavior and preferences is invaluable and has attracted more companies to become online payment providers for the gold that can be mined from those purchase histories.
These companies are learning more about their customer than ever before, including why they buy at certain times and what makes them complete their purchases. These key insights were impossible to gather when there were just offline payment methods.
The Big Data now available has become a source of rich insights that have altered marketing strategies and improved customer experiences.
For you as an eCommerce merchant or as a small business owner that leverages the power of online payments to attract and retain your customers, the rise of online payment providers means more choices for you in terms of the right partner that can deliver on your specific needs.
You’ll be able to access the latest technology and be informed about the latest industry changes that impact how you accept payments.
About the author
He was recently named #2 on Top 50 Online Influencers in the World by Entrepreneur Magazine and a Blogging Expert by Time. He currently advises several companies in the San Francisco Bay area.