How These Payment Solutions Firms Plan to Remake the Future of E-Commerce

Shopping online continues to rapidly change. This week, for instance, Instagram gave users the ability to purchase select products directly inside the app, eliminating the need to be redirected to an external website.

It seems fitting, then, that paying for such products digitally would get easier as well. That’s why several installment payment solutions firms are rolling out new programs, where consumers can buys items at a fraction of the cost upfront.

But while these initiatives may be the newest developments, big players in the industry are already looking ahead to what the landscape might look like in a year or two. The executives behind the range of payment services, in particular, are expecting a marked shift in customer expectations for e-commerce.

“Installment payment solutions are going to become as ubiquitous as the major credit cards,” said Chris Dolan, VP of strategic partnerships at Sezzle. “Soon shoppers will be able to store their preferred payment method, be it a credit card or Sezzle, in a mobile wallet like Google Pay or Apple Pay to reduce the friction during checkout even further.”

As customers’ expectations grow, the technology will also need to keep up. Nick Molnar, CEO of Afterpay, is already seeing the impact of improved machine learning algorithms on Afterpay’s business; over time, the technology is able to pinpoint riskier purchases with deeper accuracy. And the applications of artificial intelligence for payment solutions don’t stop there.

Computer screen and phone screen showing a retailer's webpage
More e-commerce sales are expected to come from mobile platforms in the coming years, as smartphones get even smarter.
CREDIT: Shutterstock

“AI is driving a global transformation that will continue to evolve, collecting data that shows how shoppers are engaging on a site and how they are paying for products,” said Michael Rouse, chief commercial officer at Klarna. “With this information, brands can better adapt their strategy to create a more efficient and effective customer experience.”

Looking ahead to what channels will see the highest sales figures, experts are increasingly predicting mobile as a critical source of revenue. While many retailers have adopted installment payment services as part of their broader e-commerce strategy, they need to ensure that this translates successfully to the smartphone experience.

“Retailers must focus on mobile as an opportunity to create a more personal experience between their brand and the shopper,” said Rouse.

On the other hand, these developments in payment solutions are not limited to online shopping. While most companies are focusing on improving the digital experience, Afterpay’s Molnar predicts greater adoption of the service in-store in the years to come. An omnichannel strategy that creates a uniform experience across channels is more important than ever, he said, with customers expecting the same ease of payment wherever they shop.

“Although we’re marketed to the online shopper, brick-and-mortar stores are rapidly adding the service, offering ease to consumers and growth opportunities for themselves,” said Molnar. “Getting the word out at point-of-sale can boost usage in stores.”

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