Paying online for goods and services is now so common-place and simple to do that it’s easy to forget that this is a relatively modern way of paying and is still evolving at a fast pace. How have we reached this point and what changes can we expect to see in the near future?
A Look at the History
We need to head back to 1994 to find the first online payment ever made. Pizza Hut can claim the title of first online purchase and it is interesting to note that the first purchase made with Bitcoin was also to buy pizza, this time at a Papa John’s store in 2010. By that time, paying online had become such a huge part of life that it made it easy to pay for all sorts of things without leaving home.
1995 was a key year, as eBay and Amazon both opened for business, introducing the idea of home shopping to millions of people for the first time. Another vital part of the process fell into place in 1999, when PayPal began to offer a simple, secure method of sending money across the planet without any fuss.
More recently, Google Pay and Apple Pay have introduced new styles of digital wallets, allowing users to pay easily using their mobile phones. Google Pay was launched as Android Pay in 2015 and can now be used in 40 countries, with support for 43 banks in 22 countries added in 2021. The Apple Pay service was launched in the US in 2013, and it can now be used in more than 50 countries around the world.
Industries That Are Leading the Way
We tend to think of eCommerce when we look at the current trends in online payments. It is true that this is a massive market, with over a quarter of the global population expected to buy something online in 2021. This means that eCommerce companies need to be focused on providing fast, safe ways of paying that people are happy to use.
However, we can see that online payments are also an important matter in media and entertainment. You might want to pay to access the latest songs from your favorite singer, to watch some live sports, or to download a new movie before it is on general release. All of these activities require you to pay a service provider. The blockchain could be widely used to get the money directly to the artist or content creator in the future. Choon and Vezt are among the platforms that let you pay with their virtual tokens and be part of the community at the same time.
The online gambling sector is another leading industry and has also reacted on a global scale to the need for secure banking methods. For example, poker players in South Africa can access safe and reliable poker sites that have multiple trusted banking options. This is because deposits and withdrawals are important factors when playing online. Therefore, timing is also a big factor for the people who play these games, which is why review sites test the times needed to move money in and out using the national currency for each method that is listed.
We can also see online payments to pay for household services and bills, travel booking, and many other things that we want or need. Each industry has its own challenges and priorities to deal with. The travel industry is a good example, as an IATA report from 2019 confirmed that this is an area that has traditionally been neglected. But that is now seen as being a key issue as customers look for greater flexibility and autonomy when they book their travel experiences online.
The Most Important Current and Upcoming Trends
While online payments have already become a huge part of our lives, the way that we carry out this method of sending money is likely to change in the next few years, as people increasingly turn to eCommerce and use less cash to pay in physical locations. One of the big changes should be a rise in the number of mobile payments we carry out.
This market is expected to increase massively, with some sources stating that the number of users of mobile wallets may almost double, to four billion, by 2024. In addition, Mordor Intelligence predicts the total amount of mobile payments to more than triple, to $4.690 billion, by the time 2025 comes around. An example of what the future could look like comes from China, where over 81% of people already pay in this way.
Greater safety and security is a huge concern in the world of online payments, just as it has always been. This had led to innovations such as two-step authentication making it easier to keep your details safe. Another security measure that could change how we pay is called tokenization. This is when sensitive data such as a card number is replaced by a piece of code, or token, to avoid the risk of it falling into the wrong hands. Biometrics could also be used to authenticate a user’s identity, removing the need for passwords and codes.
The blockchain could prove to give us the changes with the most impact. For the moment, the likes of Bitcoin can be used to pay online, but the number of companies that accept it is still fairly limited. Stablecoins offer another option that could become more accessible over time. They are backed by fiat currencies such as dollars or euros, to lower the risk of volatility that has typically put people off the idea of using cryptocurrencies. In fact, numerous countries are said to be considering the idea of launching their own national cryptocurrencies that would open up this way of paying to the entire population.
More Diversity and Easier Payments for Everyone
All of this should lead to greater diversification in the way that we pay online. While some people may prefer to stick to their debit cards or e-wallets, others will be keen to try cryptocurrencies, mobile wallets, and whatever other options are made available in the future. In this way, it should be easier for everyone to find a method that suits them perfectly.