Digital Payment Trends in 2023

In today's eCommerce climate, forward-thinking companies must stay on top of the latest trends in payment methods. As we get closer to 2023, Magento 2 store owners will significantly shift towards digital wallets, payment apps, Buy Now Pay Later (BNPL) services, QR codes, loyalty programs, cryptocurrency, and bio-metrics and voice-enabled payments. 

Store owners familiar with the changing digital landscape can use new technology to improve their sales performance and stay competitive. An array of available solutions, such as automated billing systems, personalized customer experiences, tailored promotions, and data analytics, can enhance eCommerce operations' efficiency. 

Businesses that use these innovative solutions will stand out from their competitors in the ever-evolving digital shopping environment. Read on to know more.

Payment Method #1: Digital Wallets

Digital wallets, or e-wallets, are increasingly becoming a preferred payment method in eCommerce. These digital wallets provide customers with an easy, streamlined checkout experience and greater convenience as they store their payment information in one secure place. Moreover, these digital wallets offer enhanced security by using encryption technology to protect sensitive data. 

Using digital payment wallets is incredibly beneficial, offering a secure and efficient payment experience. Statistics from Statista reveal that the total number of digital wallet users worldwide could reach 4.4 billion by 2025, compared to 2.3 billion in 2019. As such, in 2023, Magento 2 stores will likely provide customers with widely adopted digital wallets such as PayPal, Apple Pay, Google Pay, and Amazon Pay.

Payment Method #2: Payment Apps

Payment applications like Venmo and Cash App are quickly revolutionizing how customers send and receive money. Paying for goods and services no longer requires being cash-on-hand; payments can now happen anywhere, anytime, with just a few clicks on your mobile device. Particularly among younger generations, payment apps have become increasingly popular. This makes it easier to complete day-to-day transactions using exclusively digital methods.

The pymnts.com survey reported a significant difference in the use of payment applications, with 59% of millennials using one in the last year, compared to 34% for Gen Xers and 16% for Baby Boomers. This implies that more and more people are embracing payment application technology as an alternative to traditional banking transactions. Popular apps for Magento 2 stores by 2023 include Venmo, Cash App, Zelle, and Square Cash. These payment apps offer convenience, reduced turnaround times, and fewer transaction fees than their conventional counterparts.

Payment Method #3: Buy Now, Pay Later

Buy Now Pay Later (BNPL) services offer customers an efficient and convenient way to purchase goods and services. Customers can make their purchases now but pay over a period of time with no interest charges added. This payment option appeals particularly to younger generations due to its flexibility. BNPL services have become increasingly popular as they provide customers with more comprehensive options for paying for the items they need.

A recent report by The Insider Intelligence has found that the global Buy Now, Pay Later (BNPL) market is projected to reach a staggering $143 billion by 2026. Of the major BNPL providers being used in Magento 2 stores worldwide, Klarna, Afterpay, Affirm, and QuadPay are predicted to be the most popular come 2023. As this form of payment transaction continues to increase in popularity due to its convenience and flexibility, businesses seeking new revenue streams should consider integrating BNPL into their eCommerce strategy.

Payment Method #4: QR Codes

QR codes, two-dimensional barcodes that can be scanned using a smartphone, are rapidly gaining popularity - particularly with digital payments. The usage of QR codes is exceptionally high in countries such as China, where mobile payments have become the standard.

Juniper Research's report predicts that by 2023, QR code payments will have skyrocketed to an estimated 2.8 trillion worldwide—a jump of 1.5 trillion from 2020. In the upcoming years, merchants running Magento 2 stores can look forward to popular QR code payment options such as Alipay, WeChat Pay, and Paytm being available.

Payment Method #5: Loyalty Programs

Loyalty programs are driving disruptive changes within the digital payments space. Merchants can leverage rewards and incentives as part of their loyalty programs, incentivizing customers to favor a particular payment option. By utilizing these emerging tools, merchants can plant the seeds for increased customer engagement and purchasing activity.

According to a report by Access, 77% of consumers are more likely to choose a retailer that offers a loyalty program over one that doesn't. Popular loyalty program options for Magento 2 stores in 2023 include Shopify's Shop Pay, PayPal's Rewards, and American Express's Shop Small.

Payment Method #6: Cryptocurrency

Cryptocurrencies like Bitcoin and Ethereum are becoming increasingly popular in eCommerce. By accepting cryptocurrency as a payment method, merchants can appeal to a broader audience and avoid the fees associated with traditional payment methods.

According to a report by Statista, the number of people who own cryptocurrency worldwide is expected to amount to 347.70m users by 2027.

Payment Method #7: Voice Enabled Payments

Voice-enabled payments are becoming more commonplace in eCommerce, especially with the rise of assistant technologies like Alexa and Siri. This voice technology allows customers to make purchases simply by speaking their orders into their devices, eliminating the need for manual entry or authentication options. This is incredibly beneficial for those with difficulties with typing or navigating a website.

Voice payments offer store owners a streamlined checkout process that reduces cart abandonment rates. In contrast to traditional payment methods, customers can complete their purchase in seconds with voice payments making it much more likely they'll follow through and finish the transaction.

As we progress into 2023, merchants on Magento 2 stores can take advantage of popular voice payment options like Amazon Pay, Google Pay, and Apple Pay. These tools facilitate secure payments with their respective voice assistants, simplifying the checkout process for consumers.

Payment Method #8: Near-Field Communications

Near-Field Communication (NFC) is an advanced technology that eliminates the need for customers to interact physically with a payment device. Using radio waves, NFC payments can send information from one device to another quickly and securely. This allows customers to pay for items simply by tapping their phone against a payment terminal instead of using cash or credit cards. 

Brick-and-mortar stores reap multiple benefits from NFC: firstly, it helps make checking out faster since customers can pay in just a few seconds; secondly, it makes the shopping experience more enjoyable. 

Undoubtedly, 2023 will see Magento 2 store owners reap this technology's full benefits thanks to the interoperability between popular platforms like Google Pay, Apple Pay, and Samsung Pay. With these services, customers can avoid touching their phones when making purchases – everything runs automatically with just a few taps.

Which Payment Option is Best For My Magento Commerce Store?

Magento Commerce offers a range of payment options that can be integrated into your online store. These include popular payment gateways such as PayPal, Stripe, Authorize.net, and Braintree and regional payment options such as Alipay, iDeal, and Klarna. The specific payment options available may depend on your location and the payment gateway providers supported in your region.

When choosing the best payment gateway for Magento Commerce store, there are several factors to consider:

1. Customer preferences: It's important to offer payment options that are convenient and secure for your customers. Consider which payment options are most popular in your region and which ones your target audience will most likely use.
2. Fees and transaction costs: Different payment options may have different prices and transaction costs, affecting your profit margins. Consider the fees charged by various payment gateways and how they compare to your expected sales volume.
3. Integration and ease of use: Choose a payment gateway that integrates well with your Magento Commerce store and is easy to set up and use. This can save you time and reduce the risk of errors or technical issues.
4. Security and fraud prevention: Choosing a payment gateway that prioritizes security and offers fraud prevention measures to protect your business and your customers' data is essential.

Multiple payment options can improve the customer experience and increase conversions in your Magento Commerce store. Consult with Magento Certified Developers at the best Magento Development Agency in India, like Viha Digital Commerce, to ensure a smooth setup and integration of the payment gateway into your store