Payments industry in North America and beyond has evolved tremendously, democratizing business opportunities. Cost-efficient cross-border digital payments solutions have shed barriers for SMEs to conduct business around the world, competing with large international companies.
Joe Leija, General Manager North America, Ingenico ePayments, has emphasized the transformation led by digital payments adoption in an insightful report called “Four Corners of Global Payments”, saying, “Accepting global payments is no longer just for enterprise level retailers. Businesses of all kinds can sell to and receive payments from customers, regardless of their location.” Cross-platform digital payments solutions and real-time payments have tremendously affected the way businesses interact with their customers, how merchants select payment-related services, and how they engage with technology vendors.
Leija suggests that North America is the most mature payments market. As a result of highly developed digital payments industry with a wide range of alternatives, the report from Ingenico states that the region accounts for more non-cash payments than any other – about one-third of global volumes.
Electronic payments are not only expanding barriers for merchants to conduct business with international customers but comprise the foundation of economic growth of the country. Moody’s calculations suggest that each 1% increase in usage of electronic payments produces, on average, an annual increase of ~$104 billion in the consumption of goods and services, or a 0.04% increase in GDP.
In addition to boosting national GDP, electronic payments also facilitate e-commerce business. According to some projections, by 2018, there will be over 210 million digital buyers in North America, making it the third region by the metric after APAC and Western Europe. By the penetration level, however, North America is the leading region with over 78% of the population expected to be making digital purchases by 2018.
What are the challenges for digital payments industry in North America?
A Leija states, “Key challenges for this region include data security and EMV migration. More secure card-present transactions will inevitably mean that hackers will be forced further into the online space, which may cause an increase in e-commerce data breaches.”
The problem with cybersecurity has been especially sharp in recent years with numerous data breach cases and the most recent SWIFT fraud case. As a result, businesses should be attentive to the best practices and most advanced tools to ensure that the growing digital payments industry does not smash the opportunities with the respectively growing threat. In the case with e-commerce, security serves as a powerful enabler and growth facilitator.
Particular attention is paid in the report to the emergence of ‘developer friendly’ application program interfaces (APIs) – a notable feature of the North American payments market.
“New software developer kits (SDKs) and APIs are being developed regularly in the region, to aid in the growth of online and mobile commerce. To be sure, the customer journey is key for online merchants looking to trade in North America. Making payments simple and fast, using the e-commerce and m-commerce methods of choice is the best way to engage with consumers and increase conversion.”