What to expect from the e-payment sector in this new digital age

By: Cesilia Faustina

Throughout the years, the global payment sector has experienced somewhat of stability until the start of 2020 when COVID-19 struct. The changes brought by the pandemic had huge impacts on the payment industry. A McKinsey report saw the global payment industry receding by 22 percent within the first six months in 2020, in comparison with 2019. It also predicted a loss of $140 billion in 2020. The year 2020 did have a big impact on the payment sector, many businesses have slowed down or even shut down completely. This has caused a shift and greater dependency for digital means. E-payment became a huge contributor to the global payment industry and coming into 2021, people are still depending on it. E-payment is producing more investors and innovators to push the sector forward.

Digital payments have gained immense popularity since the start of COVID, and many countries today are investing in digital means to try and build their economy back up. No doubt, we are now facing a new digital age where digitalization is becoming the new norm for businesses and the economy. With that in mind, we can only expect new trends to come for the global e-payment sector.

A push with e-commerce

E-commerce has gained popularity since the pandemic as many shops were forced to close and people had to stay indoors. This method has turned the way we shop in today’s climate. I’m not saying that e-commerce will totally replace physical shops, as the in-person experience will probably be always more popular, however, we can expect more e-commerce shops popping up. Those who looked to e-commerce in the midst of COVID will likely keep their e-commerce line and those who did not have an e-commerce shop would probably start looking into creating an online store.

As the e-commerce market size continues to grow, we are likely to see more e-payment systems being set up. Businesses and shops will look to digital payment to help run their e-commerce sites. Going digital will push e-payment companies to contribute more to ensure a smooth and running workflow.

The use of digital wallets

Speaking of utilizing e-payments, a key tool in that category would be e-wallets AKA digital or mobile wallets. The mobile wallet market size was valued at $1,043 billion in 2019 and is expected to reach $7,580 by 2027. People have gotten used to the convenience of contactless and digital payments, and digital wallets support just that. We will likely see more businesses only providing payment means in the form of electronic payments, especially mobile wallets, leaving cash almost obsolete. That said, cash will still exist, it won’t be that easy to get rid of it, and not everybody has access to credit cards and digital payments; cash will still be the primary means of payment. However, we will see more people depending on their digital wallet and credit cards to make payments and save the hassles of dealing with cash and limit physical contact.

Investments in digital platforms

As mentioned, e-payment is becoming the norm in today’s economy, which is why we are witnessing more investments in e-payment platforms. Governments all around the world, especially Southeast Asia have looked at (and are) implementing partnerships with e-payment companies to try and serve their economy. With COVID, e-payment platforms have been the best solution to deal with financial means and subsidies without risking people’s lives in the process.

We can witness more and more of these investments all over the world, whether from the government itself or from big businesses looking for solutions. This dependency is creating a trend for organizations to invest in local e-payment startups and we can only assume more opportunities for the e-payment startup scene.

The rise of innovation

While we are on the topic of startups, the digital boom is creating more innovation in the e-payment sector. More and more startups seem to be entering the scene, with more opportunities available to e-payment and digital platforms. As this scene is becoming more popular, we are also witnessing more innovative inventions and creations within the e-payment community and we can only expect more to come. The need for digital payment is increasing, in various industry sectors, so we can even expect more personalized payment solutions for each sector. With innovation, the sky is the limit.

With digital transformation gaining great momentum from last year, the e-payment industry can only be expected to grow, which we have witnessed within the last few months. This sector is likely to improve and provide more innovation to our world, which is why it is a good idea to keep our eyes on this expanding digital scene.

Check out some of ESKADENIA’s e-payment systems for more information on the digital payment sector.