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Three Payment Trends E-commerce Merchants Can’t Ignore in 2022

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2021 Was The Year of E-commerce

The scorching growth of e-commerce during the pandemic decisively tipped the scales in favour of digital payments. Over the course of last year, unabating consumer demand for easy and secure payments led to the rapid uptake of alternative payments, as consumers sought more control over their spending budgets. “Buy now, pay later, pay by mobile, pay in installments” were the mantras that ruled the consumers’ consciousness throughout last year. And 2022 will see the next phase of digital payments become the norm.


Consumers’ desire for safety and convenience is constantly shaping their attitudes towards digital payments. With over 500 million e-commerce users in Europe and a penetration rate pushing 60%, the payments industry in the region is innovating to bring newer technologies into the European market. But three trends are leading the wave.

1. Real-time Payments Will Emerge Stronger

Real-time payments (RTP) are instant payments made via payment rails or networks and are available 24×7 round the year. RTPs are connected directly to a personal account rather than a prepaid balance. Request to Pay (R2P), variable recurring payments (VRP), and account-to-account (A2A) payments are seen as having the highest potential for consumer and merchant adoption. Examples of RTP networks include SEPA Instant Credit Transfer (SCT Inst) in the EU, Faster Payments in the UK, and P27 in the Nordic region.

The demand for instant payments is increasing, both from a consumer as well as a business perspective. The shift towards a contactless and real-time digital experience will see RTP volumes rise sharply in Europe in the future. RTP infrastructure continues to evolve in the region, making a strong case for their widespread adoption. The implementation of ISO 20022, open banking maturity, and new regulations will see the rise of RTP across the EU in 2022.

Currently, the SEPA Instant Credit Transfer (SCT Inst) in the EU, and Faster Payments in the UK, are the active RTP systems in the region. Nordic’s P27 network is expected to go live in 2022.

Many national RTP networks are already live, being planned, or under development. And they are flourishing. For example, India’s UPI network processed over 25 billion transactions in 2020. Brazil’s PIX network, launched in 2020, processed over 1 billion transactions within its first year of operation, accounting for 78% of nationwide bank transfers within the first two months of launch. In comparison, UK’s Faster Payments network processed over 2 billion transactions in 2020.

2. Alternative Payments Will Become Mainstream

Consumers and businesses are increasingly preferring alternative payment methods like digital wallets, But-Now-Pay-Later, and A2A payments, and this trend will grow stronger in 2022.

Digital wallets have now become the most preferred payment method in Europe, while Buy-Now-Pay-Later is growing at a phenomenal rate, changing the way people pay forever. Juniper Research predicts that by 2026, global spending via BNPL services will reach €881 billion ($995 billion). BNPL providers such as Klarna, Clearpay, and Laybuy have become highly popular amongst European consumers. At the same time, online banks, card providers, big tech companies, and fintech firms are also launching their own BNPL schemes to woo customers.

Some e-commerce merchants are gradually moving away from traditional modes of payment. Amazon recently announced that they would stop accepting Visa credit cards in the UK from 2022; as a response to the interchange fee rising from 0.3% to 1.5% following Brexit. Open banking payments, such as A2A, will likely gain in 2022 from this, as processing costs of card payments increase, leading other merchants to follow Amazon’s example.

Cryptocurrency has also gained much over 2021, rising in popularity and credibility. Bitcoin hit record all-time highs many times throughout the year, spiking interest from major tech companies and governments. In 2022, we will see a larger adoption of cryptos by consumers and businesses.

3. Embedded Payments Will Become Essential At Checkout

Reducing friction at checkout and creating smooth user experiences will become a top priority for businesses in 2022. Hence, merchants will look at ways to easily integrate digital payments with their payment gateway. Embedding payments in the checkout journey helps merchants build seamless user experiences and offer greater personalization. It is about harnessing customer data to offer relevant, contextual financing options at the point of purchase to reduce friction.

In 2022, merchants will create more embedded payment experiences for their customers, rewarding loyalty with favourable payment options at checkout. This will minimize the retailer’s processing costs while ensuring a frictionless purchase journey.

How Can Novalnet Help?

A global payment service provider (PSP) like Novalnet can help you leverage these payment trends and stay competitive in 2022 and beyond. With deep experience in European markets, we can guide you with the right strategy and tools that complement your business needs.

With Novalnet’s technology, you can accept payments globally in 125+ currencies in 150+ automated country-specific payment methods. You can set up your payments within minutes with our instant payment plug-ins. With our AI-based risk management solutions and advanced analytics, you can design the best payment experiences for your customers, and all of it in a PCI DSS-compliant environment.

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