Trends and Predictions for the Future of Online Payments

Guest post 28.12.2022. Reading Time: 6 minutes

The continual and exponential growth of online shopping has been the biggest change in consumer shopping habits for decades. When Jeff Bezos launched Amazon in 1995, it was to a largely skeptical public. And although business looked on with mild interest, it was seen as something of a novelty.

Compare that with recent figures compiled by Statista – In 2020, over 2 billion consumers used online shopping services, and worldwide the total spend was over $4.2 trillion.

Things have moved on a lot since Amazon sold its first book, and the online marketplace is now unrecognizable from those early days. Consumers now expect more from the online retail journey, and the online payment experience is constantly evolving to meet these demands.

This article focuses on current trends and what is just around the corner for online payments.

Trends and Predictions for the Future of Online Payments

Online Payments – What’s Trending

The last few years have seen a massive rise in the number of people using online shopping services. Much of this can be attributed to the Covid pandemic, but the ramifications of the change are here to stay. This has also driven one of the more notable recent trends – the demographic of those purchasing online.

Although the profile of the “average online shopper” was already moving away from being the sole domain of younger and more technically savvy consumers, the pandemic has accelerated this trend. Those shopping online now are a cross-section that is more representative of society as a whole. In fact, according to The Washington Post, consumers aged over 65 spent 49% more in the period January to October 2020 than they had in the previous year.

But it isn’t only the demographics of the average online shopper that is changing. How we buy our goods and services is also changing – Channel-less sales, integration with social media channels, subscription models, and the use of AI to maximize the use of payment data are trends that are here to stay.

In the next section, we focus on how these trends are driving the evolution of the online payments model.

Future Predictions for Online Payments

According to the BBC, the first online shopping transaction predates what we would consider the birth of the consumer digital era. Dating from 1984, the transaction was made by a pensioner who ordered groceries from a local supermarket. Although it was more a “proof-of-concept” than a genuine e-commerce beginning, the seeds had been sown.

Those who were involved in the transaction saw online shopping as being useful as a social service. However, in essence, they had done the groundwork for an industry now worth over 4 trillion US dollars annually. Predicting the future has always been difficult, but when analyzing online payment trends, it becomes apparent that the following are fairly safe predictions.

The move to subscriptions

The subscription payment model isn’t anything new. Magazines and newspapers have been benefiting from this method for decades. Recurring payments have also been commonly used for utility bills and larger purchases.

Streaming services and other on-demand entertainment channels took the subscription model into the digital age with great accomplishment. The success of these providers made other business niches sit up and take notice, and now the subscription model is being offered as a payment option for a huge range of services and physical goods. According to Forbes, the subscription services model could be worth $1.5 trillion by 2025.

The subscription model is now available for just about any goods or services you care to think about. From pre-cooked meals to pet food and household staples to health products, the subscription model is here to stay.

For businesses offering the services, there are some distinct advantages, including: 

  • Regular and guaranteed income stream
  • A growing customer database (crucial when data has become a valuable business asset)
  • The ability to offer a personalized customer experience

A streamlined shopping experience

We’ve all been there, the cursor hovering over the buy now button and an internal battle raging over whether we can justify the expense of a new gizmo. The gizmo wins, and the buy button is pressed, but for the retailer, the sale is far from certain.

It is at this point of the consumer journey that a staggering 80% of buyers back out of the transaction. According to Statista, 4 out of every 5 sales are abandoned at the shopping cart stage, and a large proportion of these lost sales are because consumers don’t want to sign up for yet another account and all the rigmarole that goes with it.

This poor conversion rate is something that online retailers need to address. One way to improve it is to streamline the online shopping experience. In other words, remove many of the stumbling blocks along the consumer journey.

This is already happening. Embedded payment technologies are increasingly used to simplify the shopping experience and increase conversion rates.

future of online payments

The rise of the hybrid model of shopping

This is another sector whose growth was boosted by the Covid-19 pandemic. Although many retailers and online traders had already started offering hybrid services like in-store pick-ups and order-ahead before the pandemic, this method rose to prominence through necessity as much of the world was locked down.

For many retailers, the option to offer customers in-store pick-ups was a godsend at the height of the pandemic, and many businesses rushed to put the infrastructure and systems in place to accommodate the method.

Although we have hopefully seen the worse of the pandemic, the systems set up by businesses remain in place, and the hybrid model is increasingly popular with consumers.

An increasing reliance on Artificial intelligence

Using data analysis to understand consumer behavior is nothing new. But the increased complexity of data science means that understanding the data that a company holds is immensely complex and processing it quickly is outwith the realm of human capability.

Enter Artificial Intelligence, the importance of AI is already widely understood in fields like process automation and fraud detection, but it is increasingly being used to understand and predict consumer behavior and shopping trends.

AI is a tool whose benefits for the online payment industry are yet to be fully explored or even understood. But its integration into payment systems and consumer data analysis is going to grow exponentially.

Among the benefits that this will bring are:

  • Streamlining the consumer buying experience
  • Using trends and forecasts to accurately predict future buying trends
  • Reducing the number of false card declines

Reduced reliance on online-shops

It wasn’t so long ago that just about all online sales were transacted through an online shop. Consumers would navigate to the shop of their choice, create an account, and hopefully, make some purchases.

Although these sales channels are still going to account for the lion’s share of online sales, the commercialization of social media channels has opened a host of new opportunities for online retailers to offer “channel-less” shopping experiences.

In essence, these days, any social media post can be a sales channel. This is a win-win situation for both the retailer and the social media platform. This opportunity is something that the interested parties are grasping with both hands, and “social commerce” is only going to get bigger.

Virtual Payment Terminals

The use of virtual payment terminals is on the increase, and this growth is set to accelerate. Once seen as a simple solution for online retailers to accept credit and debit card payments, they are now a realistic option for brick-and-mortar retailers too.

For businesses that trade both from physical premises and online, switching to virtual payment terminals simplifies the trading process and reduces costs. While the end of the physical card reader is not yet nigh, this gradual move may be a seed that signals the start of a move to a hardwareless, completely cloud-based payment processing infrastructure.


The world of online payments has always been subject to rapid evolution. It has come a huge way in a very short period, but all the signs show that we are currently in the midst of rapid change, even by online payment standards.

Spurred on by the surge in online spending resulting from the Covid-19 pandemic and rapid improvements in the fields of AI and data science, the next few years could define the way we shop for decades to come.

What is clear is that competition is going to be intense, and for companies to thrive in the online marketplace, they will need to embrace online payment trends and use all the available tools to maintain market prominence.


Craig Thomson
Craig Thomson started an IT business in Scotland that quickly evolved into a leading supplier of POS and payment systems that covered the West Coast of Scotland. After working in the retail sector for over twenty years, he decided the time was right for semi-retirement when the Covid pandemic struck. He now lives in Spain and still works as a consultant as well as being a prolific blogger on all things payment processing related.