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The evolving landscape of retail payments significantly shapes consumer behavior. As retail rapidly transforms, payment preferences are crucial to shopping decisions.
From biometric payment cards to digital wallets and Buy Now, Pay Later (BNPL) options, consumers are increasingly drawn to retailers that provide their preferred payment methods. Research suggests that many online shoppers have abandoned purchases due to a lack of payment choices.
Moreover, the rise of BNPL services has become a norm across various retail sectors, appealing to a wide demographic range, particularly younger consumers. As consumers engage with brands across multiple channels, providing a unified omnichannel experience has become essential for retailers looking to enhance customer satisfaction and loyalty.
Liam Gerada, CEO and co-founder of Krepling, noted that this trend is particularly prominent among millennial and Gen Z consumers who seek financial services from non-traditional providers and demand seamless experiences across various platforms. Krepling enables e-commerce businesses to create, manage, and scale online stores without coding knowledge.
Adapting Payments to Consumer Preferences
The rise of embedded finance and partnerships with independent software vendors (ISVs) further highlights the impact of consumer choice on the digital payments industry. By collaborating with ISVs, merchants can offer innovative payment experiences through social media, rewards sites, and customer loyalty programs.
“Many companies recognize the importance of adapting to these evolving consumer needs by embracing new payment technologies, partnering with ISVs, and prioritizing customer preferences to position businesses for success in the rapidly evolving digital payments landscape. These shifts in consumer choice and flexibility drive the digital payments industry to become more agile, innovative, and customer-centric,” Gerada told the E-Commerce Times.
In many ways, the widespread adoption of contactless technology has been the most consequential change in retail payments. While digital wallets were rising like a tidal wave online, the presence of contactless technology in smartphones has made everyone’s favorite device a simple and easy way to pay in-store now, too, offered Jason Pavona, GM of North America Enterprise at Worldpay.
According to recent Worldpay data, “Nearly one-third of all payments at point-of-sale in the U.S. will be made by digital wallet by 2027,” he told the E-Commerce Times.
Innovative Payment Solutions for Retailers
One of the latest solutions to meet this demand is the introduction of the e-commerce channel management platform Krepling Pay. It gives merchants in over 150 countries more transparency to payment fees and encompasses multi-layered encryption and security features to protect merchants’ and customers’ privacy and data.
The platform’s user-centric payment gateway feature helps merchants reduce e-commerce cart abandonment rates and increase conversions faster. Merchants now miss out on potential e-commerce sales opportunities due to cart abandonment, which has a global average rate of 70%.
According to Krepling, most online shoppers do not complete their purchases because of high shipping fees, confusing return policies, or the time it takes to create a profile. Krepling Pay alleviates this industry challenge by providing a seamless checkout process for merchants and customers that will save time and lower costs.
The platform offers centralized e-commerce workflow integrations and customer analytics to help merchants track trends and execute impactful strategies. It integrates with popular e-commerce platforms.
“We understand the retail payments space is rapidly evolving, creating many new challenges for merchants to provide a seamless, secure, personalized checkout experience. That’s why we developed Krepling Pay — with one-click transactions, localized currency, language support, and customizable layouts,” Krepling’s Gerada explained.
How Krepling Pay Works
Krepling Pay modernizes e-commerce transactions with a one-click checkout process. Once customers input their personal and credit card information at checkout, a digital wallet is created in seconds that encrypts the customer’s personal information.
This system enables quick purchases on any browser or device, matching currency and language preferences for seamless cross-border e-commerce.
“We used a data-centered and user experience-based approach to develop the most simple, fast, and useful payment gateway integration for customers to feel satisfied during their shopping journey while also helping merchants reduce cart abandonment and increase sales. Privacy is also important to us, which is why we made Krepling Pay PCI compliant to support 3D secure checkouts to keep the business and payment data safe,” Gerada said. It encourages customers to complete their purchases quickly and reduces cart abandonment rates plaguing online retailers. The localized currency and language support cater to the preferences of a global customer base, fostering trust and loyalty.
Retailers Must Adapt to Consumer Payment Expectations
According to Worldpay’s Pavona, merchants must be receptive to flexible payment strategies to meet evolving consumer expectations and capitalize on emerging opportunities. For example, digital wallets accounted for half of all online sales by value last year.
Digital wallets turn online checkouts into a single click to enter payment credentials with personal and shipping information, preempting the need to store credentials with a new retailer.
New payment trends and consumer behavior are reshaping retail transactions, prompting retailers to rethink their payment strategies to better serve their customers.
“It also drives a conversation on who owns the customer and how retailers need to change their mindset on retention, rewards, and service,” Pavona explained.
Fintec Operations Share Similar Pain Points in Payment Technology
The shifting dynamics of retail payments also affect financial technology or fintech payment processes. Two main factors are involved. One is the rise in fraud due to advancements in technology and AI. The other is the growing importance of customer experience or CX.
In 2023, the global retail sector lost US$429 billion to payments fraud. Nearly half of all businesses worldwide experienced some form of fraudulent activity, cyberattacks, or data breaches over the past year — an increase of 32% compared to 2022, according to Donal McGuinness, CEO of payment link platform Prommt.
“This calls for immediate investments in secure payment processes and fraud prevention measures,” McGuinness told the E-Commerce Times. “Preventing fraud, protecting customer data and privacy, and ensuring compliance with regulations are increasingly becoming top priorities for payments technology.”
He explained that it requires implementing data encryption and tokenization, enforcing strict data governance, applying access controls and robust authentication measures, and adhering to global compliance standards.
Millennials, Gen Z Reshaping Retail Payment Priorities
As the final touchpoint, payment experience leaves a lasting impression on the brand, observed McGuinness. So, it is crucial to remove friction at checkout and offer a variety of payment methods.
Nearly half of both market groups (51% of millennials and 48% of Gen Z) would abandon a purchase if their preferred payment method is missing. Even more, 67% of Gen Zers believe that automated payments will reduce time at checkout and enhance their overall shopping experience.
“They effortlessly move between physical stores, online platforms, and virtual experiences, and want the freedom to make payments at their convenience, from any location, and using any device,” McGuinness said.
“They are reshaping retail with their hybrid shopping behaviors.”
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