E-commerce in the Americas has seen significant growth in recent years, especially in the post-pandemic era. Part of this success is anchored by the availability of various payment methods that make online purchasing easier for users, providing them with the necessary security and confidence when making transactions.
For this reason, the inclusion of different payment methods in e-commerce is vital to achieve effective purchases and prevent shopping cart abandonment.
Online retail sales are estimated to reach $200 billion by 2026 in Latin America alone, according to the Statista website, becoming a significant part of retail commerce.
However, to be part of this statistic, companies must offer multiple payment methods within e-commerce platforms and ensure trust in them.
Next, we’ll review the most commonly used payment methods in e-commerce in the Americas.
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Most commonly used payment methods in e-commerce in the Americas
An essential aspect of e-commerce platforms is to provide tools to finalize sales online. For this, businesses must offer payment methods that suit their business model, location, and target audience.
If they don’t provide options that give users the confidence, ease, and security they seek when sharing sensitive information online, the chances of cart abandonment increase.
Therefore, companies should offer more than one payment method to give users flexibility and ensure a backup method.
Various payment methods have gained relevance in the Americas, depending on the country. We’ll mention them below.
Credit or Debit Cards
The traditional method for users, which has been used for decades as the first payment medium that facilitated online purchases. It offers users immediacy in payment and security, plus additional services like financing, discounts, or other benefits provided by card issuers.
In Latin America, according to a publication by Americas Market Intelligence, credit cards account for 48% of online sales. However, this number is projected to decrease due to the adoption of alternative payment methods like digital wallets.
In the U.S., credit or debit card usage ranks second, thanks to the growth of alternative methods and their easy adoption.
Electronic Wallets
Globally, electronic wallets are the most used payment method in e-commerce, accounting for 49% of total e-commerce spending, as indicated by the Oberlo website.
This method involves apps or platforms that facilitate digital money transfers without sharing personal or banking data, offering users speed, security, and convenience. Examples include PayPal, Mercadopago, Bizum, among others, which have solidified their position in Latin American markets.
In the U.S., according to Oberlo, digital wallets account for 32% of transactions, relegating credit card usage to second place. In Latin America, they remain in second place.
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Mobile Payment Apps
This method, facilitated by mobile devices through services like Google Pay or Apple Pay, has been growing, especially in the U.S. A publication by the Stripe website estimates that by the end of 2023, it will account for 43% of total retail e-commerce sales.
Access to payment methods facilitated by mobile devices will directly influence the growth of the e-commerce sector. Giants like Google and Apple continue to use their devices’ information and versatility to offer users tools that simplify and expedite online purchases.
Other Payment Methods
Besides credit/debit cards and digital wallets, other methods have emerged and adapted to the context or remained to give users a variety of options that suit their needs. Among them:
- Bank Transfers: A safe and economical method involving transferring money from one bank account to another. However, it requires more user intervention for transaction approval, making it slower and possibly taking longer for payment to be effective.
- Cash on Delivery: This method means the customer pays when receiving the goods. It’s used in countries where banking is not widespread or credit card usage is uncommon. It gives users the assurance that they will pay once they receive the product.
- Buy Now, Pay Later: Similar to credit card services, it finances the purchase without needing a card.
- Cryptocurrencies: In recent years, this method has become more popular in e-commerce, being a fast and decentralized method. However, it still faces challenges regarding regulations and volatility.
A topic gaining more and more relevance: Should your e-commerce accept cryptocurrencies?
Most commonly used payment methods for e-commerce – Conclusion
An essential part of e-commerce focuses on payment methods, necessary to ensure purchases are finalized and shopping carts aren’t abandoned. To prevent this from affecting online sales growth, it’s essential to evaluate the target audience’s conditions, market and technology trends, and the context in which the store operates. This way, the decision-making for selecting payment methods will be more informed and assertive.
At NULogic, we specialize in implementing e-commerce platform solutions and including various payment methods that support the online store’s purchase cycle. Contact us, and we’ll help you implement the best payment solution for your ecommerce.