What payment models are scaling during COVID and what factors do you attribute to their rapid rate of adoption and growth?
During COVID-19, demand for digital goods and services has drastically increased as customers have been forced to shop safely from home and businesses have entered into the online space, some for the very first time. As a result, new demographics and geographies have warmed to this digital way of doing things – such as older demographics choosing to make online payments – and digital businesses are reaching a critical mass.
It’s essential that these businesses choose the right payment models if they are going to be successful in this bustling online environment. While customers have become increasingly comfortable shopping online, that doesn’t mean they are happy using any digital payment method – they will still have their preferences and companies should be aware of this if they are going to optimize conversions. Ingenico research shows that up to 42% of customers are likely to drop off and search for an alternative website if their preferred payment method is not offered at the checkout.
In addition, venturing into the online space has opened doors for a lot of businesses who are able to expand into new geographies thanks to their new-found digital capabilities. These businesses must also remember that preferred payment methods vary from region to region and should cater to the needs of customers in each locality.
One payment model that has become increasingly popular among businesses across different sectors over the past few years is the subscription model, especially for goods that were previously purchased on a one-off basis, such as video streaming and audio. And this isn’t just applicable to digital goods, companies are offering subscriptions for physical products too.
With businesses opting to use the model and more customers shopping online, consumers are going to be exposed to it more than ever. In fact, use of subscription models increased throughout the pandemic with companies across different sectors experiencing its growth. eLearning companies have seen education app downloads rising by 90% in March, which are often purchased via a subscription. At the same time, Netflix hit 183 million subscribers in Q1. We’ve seen this trend being of particular importance in the eLearning, eStreaming, eContent and digital gaming industries and that’s where our focus will lie going forward.
Heading into the future, customers will likely continue shopping online as they have become comfortable with it. As a result, we can expect to see digital payments being favored, while the popularity of subscription models will grow.
About the Author
Andrew Monroe GM, North America Ingenico ePayments – Global Online
Andrew Monroe is the General Manager of North America at Ingenico ePayments, Global Online. With more than 15 years of experience in eCommerce and sales, Andrew has a deep understanding of the payments industry. He has managed teams in Fintech organizations in multiple continents, delivering customized solutions across different verticals and regions.
Before being appointed as General Manager, Andrew was the Head of Business Development for North America, Head of Business Development, EMEA and Head of Account Management, EMEA for Ingenico ePayments. In each of these roles, he has increased clients’ revenues and created seamless payment experiences for consumers.
Andrew is an active speaker in the payments arena, giving presentations at technology summits, leading webinars, and educating professionals around the world. He shares Ingenico’s commitment to knowledge-sharing initiatives, has co-authored white papers on market analysis and strategy, and led case studies with high-profile companies, such as Levi’s and Rail Europe.
He has a BS in Business Administration with concentrations in Finance and MIS from North Carolina State University and an MBA from TIAS School for Business and Society. He lives in Atlanta, GA with his wife and three kids and enjoys running and doing yoga.