• Simone Lavicka, Head of Strategy, Marketing & Sales Enablemen at Digital Commerce Worldline


• 23.02.2022 04:30 pm
undisclosed

Challenges for digital merchants emanating from the pandemic, such as restrictions to movement, continue to ease as we move further into 2022. Within a context of economy recovery and digital acceleration there are five significant trends which we believe are most likely to affect online retailers this year, namely: innovation, consumer behaviour, cross border payments, competition and regulations.

Technological innovations

The growth of new technologies as well as the rising importance these innovations hold in the Fintech space are expected to continue and perhaps even accelerate throughout 2022 for the benefit of merchants. Such technologies include Artificial Intelligence (AI) & Machine Learning (ML) driven data analytics, block chain based digital currencies – for example a central bank digital currency (CBDC) effectively the digital form of a fiat currency – embedded payments (e.g. in-vehicle or home assistant payments) and more. 

By adopting these technologies, retailers will be able to use data to tailor their products towards the bespoke needs of their customers and streamline their processes to bolster revenue. 

Consumer behaviour

Consumers continuously rely on social media which in turn fuels the growth of social commerce via platforms such as Instagram, TikTok and Facebook. This means that brands increasingly rely on social media influencers to contribute to promoting and advertising their products and/or services. 

Similarly, live streaming events have become more and more popular tools. The Covid-19 pandemic as well as the subsequent government lockdowns and various health and safety restrictions have made consumers rethink what matters when it comes to online purchases and are now prioritising safer methods such as curb side pickups or home delivery. Therefore, online shoppers are more likely to rely on digital channels. This further strengthens the need for businesses to adapt accordingly, ensuring they have a strong digital footprint to capitalise on these important channels to market.

Cross border payments

Cross border shopping is nothing new and this trend is expected to continue to expand steadily over the next five years. Leading markets for ecommerce include, but are not limited to, Brazil, Russia, India and China. These markets have seen strong ecommerce growth over the past decade due to a rise in consumer spending as well as rapid digital transformation. Operating in these markets requires adapting to local payment preferences and complying with local rules and regulations, but we expect global merchants to increasingly consider cross border payments markets in 2022 if they want to scale their business. 

Competition

The payments industry is a very dynamic space with more competition than ever before and consolidation occurring at the same time. Payment companies looking to gain competitive advantage will continue to evolve by tailoring solutions to specific industries or verticals, providing more efficient solutions or opening up new markets.

Regulation

Finally, 2022 is likely to see a strong focus placed on payment infrastructures, via PSD2. Therefore, trends including but not limited to Open Banking – opening data and partnering consumers, banks and businesses via APIs so that third parties may offer financial services – and Strong Customer Authentication – a set of rules aimed at further enforcing the security of payments and combatting fraud – will be at the top of priorities for all parties involved, including regulators and fintechs. 

In conclusion, it will be as important as ever for online businesses to adapt, where possible, to the technologies at their disposal. Using data will help them realise the changing behaviours of their consumers, who are becoming increasingly digital through the rise of social media as a tool for e-Commerce. New areas for growth can be found through cross border payments and finally the latest payment regulations, such as PSD2, are also crucial for merchants to keep pace with their competitors.