The option to shop for products and services on the move or from the comfort of one’s home is more than welcome today. It didn’t take long for people to find methods to make this simple. In the last few decades, as the Internet became a shopping hub for customers, the banking system has changed at its core.
Saying that the Internet revolutionized shopping experiences for people is far from a stretch. These days, you can buy almost anything without having to set foot in a physical store. This is so popular that in 2021, the number of digital shoppers reached 2.14 billion, which equals over a quarter of the global population.
The numbers grow more every day. The interest was even strengthened further during the pandemic when, with quarantine and shops being closed, the only option for many was to buy things on the Internet.
As can be expected, the ecommerce world has had a tremendous effect on the banking industry. People didn’t only change the way they shop – they also changed the way they handle money. Electronic commerce swiftly followed the widespread customer adoption of the Internet, and banks have adapted to this on a tremendous level.
That’s precisely what we will discuss here – how the ecommerce sector affected the banking industry.
1.Business ecommerce banking is mostly handled electronically
Payment systems that are electronically based exist since the 1960s. Over the years, they’ve been expanding and developing at an incredible pace, growing in numbers as well as complexity. In major industrialized countries, the majority of business payments are already processed electronically.
This is even more prominent in the ecommerce sector. Businesses that operate online are very unlikely to use traditional banking methods to make their purchases and keep track of expenses. Nowadays, ecommerce banking with Juni is widely used by stores and businesses. It’s a way to make simple online transactions while enjoying non-stop access to all the information in a single place.
Juni is a financial platform created specifically for the needs of those in the ecommerce sector. Companies based in the UK and EEA can use this method to handle all transactions with ease without having to step foot in a physical bank.
That’s how far the business world has progressed thanks to the mixture of ecommerce and banking. According to PaymentsJournal, the pandemic has spurred the use of online banking for businesses, especially small ones.
2.The number of people using online payment methods is growing
People followed suit with this trend, too. Even before the pandemic, a staggering 71% majority of customers reported using online banking services to make their purchases. A lot of this was facilitated – and encouraged by ecommerce stores.
Once the pandemic reached most parts of the world, online processed transactions among customers grew at the fastest rate so far – approximately 236%.
Now that the pandemic has slowed down and we’re all getting back to our normal ways of living, customers don’t seem to give up on the new, modern way to handle their finances. Most of them don’t even visit the banks.
They fill their accounts via ATMs, make online purchases, and use their cards instead of cash when they pay in stores. They pay their bills online and buy at ecommerce stores with cards, e-wallets, and other intermediaries.
3.Third-party banking intermediaries are more popular than ever
Intermediaries like PayPal have existed for a long time now. The oldest e-wallet was almost instantly recognized as a fast way to pay vendors, stores, and merchants instead of providing card details or paying in cash in stores.
Today, PayPal’s ecommerce platform is stronger than ever. Such methods are accepted in numerous online stores, and people use them all the time to improve their security, make their payments more confidential, and enjoy the speed and flexibility this offers.
Yes, cards remain a top method for making online purchases, but the interest in other options is changing. The ecommerce world has opened up an entirely new way to pay for things. Today, when you go online to buy something, you can find an array of payment options ranging from credit and debit cards to prepaid cards to e-wallets.
4.Online banking makes customers happier
Banks had to adjust to the ecommerce sector and therefore, they adjusted their services to be available online for customers. As banks adopt the online infrastructure and practices of ecommerce, many have access to electronic banking and things like e-brokerage.
The beauty of this system is in the low cost, high availability, and a great deal of convenience. Banks can now offer 24-hour service online, transactions during weekends as well as weekdays, fast delivery, and AI-powered personalized service. Applications are approved faster, and things like data entry are handled by the customer, all of which improve satisfaction levels and reduce costs for both sides.
5.People can create accounts at online-only banks and payment platforms
Banks were entirely different a decade ago. They were simply institutions where you could go to pay for things, get your money, exchange checks for cash, and enjoy a few other financial services. When ecommerce entered the market, a new form of banking came alive – electronic banking.
We aren’t just talking about the bank app you have on your phone that you can use to make transactions. Ecommerce brought on online-only banks, institutions without physical locations where you can go to withdraw your funds and make payments. Such banks work entirely online.
Of course, these banks immediately grabbed the attention of customers. The option to have an online account, make money transfers from any place, and even get a card by ordering it online is hugely trending even today.
Platforms like Payoneer made finances for international businesses a thousand times easier. They made it possible for freelancers to get payments from any part of the world without delays or high fees.
This was all prompted by ecommerce and the option to buy online. Now it has expanded to the working sector and the business world, forming an online-only banking revolution.
6.The crypto market is a popular way to handle finances
When Bitcoin first appeared on the market, everyone was hesitant about this new digital currency and what it can mean. Fast forward to today, and you get over 18,000 different cryptocurrencies roaming the financial world.
Right now, central banks are investigating the digital version of currencies, using pilot programs and investigating their option. A novelty like “Britcoin” is announced to be issued by the Bank of England sometime soon, while Sweden is moving toward becoming the first cashless nation by 2023.
People use their money to buy crypto and sell it for money, using transfers that change the traditional banking system altogether. New cryptocurrencies are raising enormous pressure on central banks to create digital versions of their own.
With a mass worth over $2.2 trillion at the moment, the crypto market is shattering the traditional banks as we know them. Even though they’ve been here for some time now, we can expect them to change the financial world even further with stablecoins being integrated into ecommerce platforms every day.
As a matter of fact, you shouldn’t be surprised to find an ecommerce store where you can buy with Bitcoin. You can now make transactions with crypto online, sell them and exchange them, use them to shop, gamble, etc.
7.Banks have more access to customer behavior
Online shopping has offered financial institutions like banks an amazing opportunity to learn more about their customers. Thanks to artificial intelligence and testing, they can now keep track of customer behavior, transactions, and discover their interests.
This is beneficial for both the ecommerce sector and banks. Based on data mining, they can provide customers with better financial options and high-quality products they need.
8.In-store payment options have increased in number
Long gone are the days when you could only use cash to buy something in an actual, physical store. Today, people are so accustomed to buying online that they expect this to be an option in physical stores, too.
As a result, brick-and-mortar stores are offering different options for payments, and we aren’t talking about cards. You’ll hardly find a store where you cannot pay with a card, but many already introduce options like Google Wallet and Apple pay for in-store payments.
This was all prompted by ecommerce. People seem to love the option of not carrying cash all around, and being able to make payments with just a swipe, contact with their card, or their phone.
9.Banks enjoy new business opportunities
Ecommerce brought new business opportunities for banks, too. They now have the chance to offer new services and products to serve the needs of this industry. They can offer protection for ecommerce against fraud, financial assistance for online businesses, electronic billing help, and more. Moreover, they can act as an intermediary of information to safeguard the online customer’s privacy.
Ecommerce has a big impact on the banking sector!
Judged by all you’ve read here, we can conclude that ecommerce has changed the banking sector at its core. It prompted the creation of new options for making simpler, cheaper, and faster payments. Thanks to ecommerce, the banking system had to adjust and develop to meet the need of consumers, so we all enjoy improved banking today!