The e-commerce environment is more competitive than ever. Mark Chirnside, CEO of payment gateway PayU looks at three top trends that companies need to be aware of.
There is no disputing the fact that, with the increased adoption of mobile technology and alternative payment methods, e-commerce is set to really take off in all South African markets. This move will gain even more momentum with increased internet penetration, lower data costs and more robust security penetration – strides in the digital realm which will undoubtedly see the unfolding of exciting trends in the e-commerce environment. However, these strides also bring with it an increased competitive edge for companies who want to trade in the e-commerce realm.
Survey results by Marketlive, a leading provider of e-commerce technology and services that help fast-growing companies sell goods and services online, indicate that in 2013 the competitive challenge for online merchants is steeper than ever. This rings true for local markets as well. Locally, e-commerce is growing at a rate of 30% per annum, while independent studies further indicate consumers’ increase support for online retail sites.
Online payment service provider PayU, which processes 65% of all online transactions in South Africa, is in a unique position to track the spending trends, tendencies and strides in the e-commerce environment. According to CEO Mark Chirnside, it is “important to understand the undercurrents of e-commerce to ensure that your company doesn’t come up short in 2013.”
According to Chirnside clear trends are already beginning to crystallise in 2013:
Small companies – big gains
Local entrepreneurs stand to gain massively in 2013. Small to medium enterprises that traditionally had to vie for the same marketing space can now, in effect, sell to a captive South African online audience in a matter of days. This has been made possible with innovative services like PayU EasyMerchant, offering start-ups and SMEs a quick and simple way to take their business online. By eliminating the tedious and often time-consuming requirement of setting up an online merchant account with a bank, these kinds of services enable new online stores to accept card payments easily and quickly. The payment processing fees have also been reduced for small to medium business, offering entrepreneurs an afforadable new sales channel, as well as a safe payment gateway for the consumer – a win-win situation.
(Even) safer payment methods
Modernisation is an insatiable reality and nowhere is this reality felt more readily than in the digital realm where security systems are constantly updated to ensure the safety of consumers’ online transactions. Modernisation of the call centre industry – which in many cases still relies on call centre agent and call recording to process payments – is a top priority in 2013. Secure voice transactions is the way of the future, as recently indicated by a partnership move by PayU. The latter partnered with UK based company Semafone, a system which allows a customer to enter their credit card information using the telephone keypad while still on the phone to the call centre agent. The card data is sent directly to the bank, completely bypassing the call centre agent and call recording– eliminating agent fraud and its associated reputational risks to the parent company. This move also lowers the barrier of entry for new businesses looking to enter this marketplace.
Coupon and loyalty points shopping
Consumers are increasingly taking their spending habits online, a trend which is effectively capitalised on by institutions offering rewards, coupons or loyalty programmes. Apart from the consumer perceiving a bang-for-your-buck sale, studies also suggest that many consumers feel ‘safer’ shopping with loyalty points or coupons. In fact, according to PayU’s online shopping research, loyalty currencies are the second most popular form of payment, led by e-bucks and Discovery Miles. The latter recently partnered with service provider PayU, increasing the online outlets where consumers can redeem their Discovery Miles. With this move, Vitality members, for example, who are Discovery Mile subscribers, can choose the full amount of the purchase using Discovery Miles when shopping online, or make a part payment with their Miles and settle the balance with a credit card.