Online Marketplaces Embrace Digital Wallets and BNPL for Payments, Eyeing Innovation
Online marketplaces such as Amazon, eBay, and Rakuten are increasingly adopting digital wallets and buy now, pay later (BNPL) options as preferred payment methods for their customers, according to a collaborative research study titled «Embedded Payments and the Retail Innovation Agenda» by PYMNTS Intelligence and Carat by Fiserv.
The study reveals that 58% of eCommerce platforms that currently accept payments via digital wallets are keen on innovating the payment process, along with 39% of platforms offering BNPL services. This suggests that marketplaces are actively exploring a holistic approach to their payment strategies. Additionally, the research found that 22% of marketplaces not currently offering BNPL intend to introduce it in the future.
The report, which delves into the state of PayFacs, marketplaces, and independent software vendors (ISVs) in the retail sector, highlights that 30% of eCommerce platforms prioritize customer experience as a cornerstone of their innovation strategy. Given this emphasis on customer experience, the adoption of BNPL schemes appears to be a logical choice for these platforms.
Jacqueline White, President of i2c, emphasized the rapid evolution of BNPL, noting that it was a relatively new concept not long ago but now has the potential to revolutionize the retail industry. Marketplaces are at the forefront of BNPL adoption, although the increasing demand for BNPL might be outpacing merchants’ rate of adoption. A separate PYMNTS Intelligence study revealed that only one-third of acquirers currently allow merchants to endorse BNPL plans, indicating room for growth.
White further stated that 2024 could be the year when BNPL achieves ubiquity, as new BNPL offerings are customized to suit individual use cases and credit profiles, all tied to the point of sale, whether online or at a physical store.
By embedding payment options like BNPL into their platforms, eCommerce marketplaces can attract more consumers while generating revenue through payment processing fees. «The Rise of Embedded Payments,» another PYMNTS Intelligence study, reveals that approximately two-thirds of marketplaces expect their revenue share from these fees to increase in the next 12 months.
In an uncertain economic environment with high-interest rates, businesses that offer popular payment methods have a chance to stand out from competitors. Enabling consumers to pay with digital wallets or BNPL not only attracts and retains more shoppers but also enhances their overall shopping experience. As the retail landscape continues to evolve, online marketplaces are adapting to meet the changing preferences of their customers.