Ahead of the Retail Technology Show, we interviewed Moshe Winegarten, CRO at Ecommpay, about the problems and opportunities for retailers in the ecommerce sector, and the trending payment habits retailers must be aware of.
What are the three main trends in ecommerce payments that you see gaining more ground in 2023?
The first and most important trend that comes to mind is the interchange and scheme fee changes. Merchants selling between the UK and Europe have been significantly affected due to Brexit, with payments once regarded as domestic or intra-transactions now treated as international cross-border transactions. In addition, many merchants must navigate red tape to acquire licences to sell into certain territories.
Subsequently, businesses must decide whether to take on the additional cost themselves or pass that burden to the end-consumer — a choice made even trickier due to the global recession. With the extra costs incurred due to Brexit, there are certain ways that businesses can be set up to mitigate those cost increases.
Another topic of interest is payment orchestration — connecting various payment service providers, acquirers, and banks on a single, unified software layer. Merchants are beginning to understand the benefits and flexibility payment orchestration can bring, and they're also interested in the resiliency it offers when entering new markets.
As far as the providers are concerned, the situation is similar to when insurance comparison websites became popular around 15 years ago. Some insurers refused to join the platforms as it put them in direct competition with their rivals, but they eventually realised they had to follow the market trend and join the bandwagon.
2023 has also seen significant activity in the Open Banking space, which has been a focus point for the UK, with the government committing to making use of its benefits. Moreover, current figures show that the number of consumers and SMEs actively using Open Banking-powered services in the UK has reached 7 million.
Of course, the rising cases of payment fraud during a harsh economic climate may help push the need for Open Banking, driving further use of the technology within the UK. However, providers of Open Banking technology must ensure that they meet regulations and security standards. Most Open Banking payments are made via mobile devices, and features like FaceID and TouchID on smart devices not only comply with Strong Customer Authentication (SCA) but also provide an added layer of security.
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