A lot has changed since the internet has become a space for commerce. With more and more people from across the globe shopping online and using the web to work, communicate and send money, there is an increasing demand for efficient and secure methods to send money instantly. The payments industry, once dominated by banks, has become a competitive landscape, where service providers must evolve with technology to meet consumer demands.
A global economy means International Online payments
The Changing Face of Payments: A Review of Current Payments Infrastructures, Drivers for Change and Implications for the Future, June 2011, a report by the Financial Services Club and Cognizant Technology Solutions which surveyed 300 finance industry professionals from around the world, reveals that retail e-commerce is on the rise globally, and that more and more individuals are sending money online, peer to peer. The report found 96% of all respondents consider internet-based payment services are either ‘most important’ or ‘important’ when it comes to changing how payments are made. According to the report, online payment processors have become an essential player in the payments industry because of increased user demand for a simple and secure way to send money, in real-time and in a variety of currencies.
E-entrepreneurs need simple solutions
Traditional payment methods such as credit cards and debit cards may still dominate the payments market, but online payment processors are getting a larger slice of the pie because of their ability to meet the unique needs of a growing population of e-commerce entrepreneurs. With online shopping on the rise, more SMB operators are using the web to run their businesses. These entrepreneurs need an efficient way to accept payments, pay their staff and exchange money. While creating a merchant account with a bank or credit card provider can be a costly and lengthy endeavor, online payment processors are structured to meet merchants’ needs by acting as an intermediary, which allows entrepreneurs to receive payments, to send mass payouts, and more.
Bright forecast for non-traditional payment methods
Today, traditional payment options such as credit and debit cards account for a combined total of 75% of retail e-commerce sales, but this figure is expected to drop to 72% by 2016, according to Javelin Strategy and Research’s report, 4th Annual Online Retail Payments Forecast 2011-2016: New Regulations Leave Credit Poised for a Comeback. The report reveals that alternative payment options such as online payment processors, prepaid cards and gift cards are gaining popularity with online shoppers. According to Javelin’s report, alternative payment options in 2010 accounted for 25% of online retail sales. By 2016, Javelin predicts that alternative payment options will make up 28% of total online retail sales.
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