Online payment methods are essential for the dynamic and fast-growing e-commerce sector, enabling smooth and convenient transactions. In 2022, the e-commerce industry witnessed its biggest growth in a decade, rising by 19% to reach $4.6 trillion. This growth is equivalent to almost three years of normal development in one year.
Forecasts indicate that by 2024, e-commerce will grow by another 60%. This growth will be mainly driven by mobile commerce through apps and social media platforms, potentially reaching a global total of about $7.3 trillion.
The diversity of online payment options available today reflects technological innovation and the increasing demands of a global market.
Read on for everything you need to know about online payment methods, their role in the e-commerce sector, and the trends that will shape the next year.
What are online payment methods?
Online payment methods are digital ways of sending and receiving money online. They use various technologies and mediums, enabling instant transactions across different platforms.
A common example is using a credit card to buy products online. When customers enter their credit card details on a website, they are encrypted and sent through a secure payment gateway. The transaction is verified, and funds are transferred from the buyer’s account to the seller’s account, all in a few seconds.
What are the types of online payments?
Several types of online payment methods cater to diverse consumer preferences and technological advancements, most notably:
Credit and debit Cards
The most prevalent type is supported by many e-commerce websites.
Solutions such as Apple Pay and Google Pay provide convenience, avoiding the need to enter payment details for every transaction.
This method lets users pay with their smartphones, usually by touching the device on a contactless terminal.
entail the online transfer of money from one bank account to another.
Buy now, pay later services
These services allow customers to buy products and pay for them in parts, providing more flexibility.
Benefits of online payment methods
Here are the three most common benefits of enabling online payment methods for your growing business:
The possibility for your customers to pay from anywhere with an Internet connection has transformed the shopping experience.
Sophisticated encryption and security measures safeguard both customers and businesses from fraud.
By offering different ways of payment, businesses can appeal to local tastes and grow their customers worldwide.
Popular online payment methods in 2024
The year 2024 will see more changes in online payment methods, as they adapt to the shifts in technology, customer choices, and economic patterns.
We present our forecasts for the year’s most widely used online payment methods. These methods, ranging from well-known ones to innovations, transform how consumers and businesses conduct online financial dealings:
Mobile payments vs traditional cards
Online payment methods will keep changing in 2024, as data shows that digital wallets and mobile payments are becoming more popular and gaining more market shares.
In 2022, about half of all global e-commerce payment transactions were done through mobile wallets, making them the most common online payment method in the world.
This trend is expected to continue, with mobile wallets projected to have more than 54% of the market by 2026. On the other hand, credit cards, which had a 20% market share in 2021, are predicted to lose users in the next few years.
Traditional methods like credit and debit cards are being supplemented by new solutions like biometric payments and blockchain-based transactions. These trends show a move towards more convenience, security, and global reach.
This online commerce method uses social networks to enable transactions, offering a smooth shopping experience within social media platforms. The growth of social commerce is driven by the growing number of social media users and their preference for easy, available shopping experiences.
Worldwide, social commerce generated revenues of about $728 billion in 2022 and is expected to grow at a CAGR of 31.6% from 2023 to 2030.
Alternative payment methods (APMs)
APMs, which cover digital wallets, bank transfers, mobile payments, and Buy Now, Pay Later schemes, offer more flexibility and variety for payment options, meeting the needs of different consumers.
The global cashless payment volumes are increasing by 42%, and APMs make up a big part of that. This change is mainly due to the growing importance of convenience, security, and payment speed, as well as the rising preference for mobile commerce and e-commerce.
Online payment methods are always changing, following the changes in eCommerce. The situation in 2024 provides unmatched convenience and security because of the widespread use of credit and debit cards, and the growth of digital wallets and mobile payments. These innovations help businesses and consumers connect better.
Our platform supports many online payment methods, and we encourage businesses to try these options and improve their transactional abilities. Our payment solutions are safe and simple to use, making them the ideal choice for businesses of any size. We also offer various support services to help businesses with the transition.