A look around the globe offers insight into payment trends from the merchant perspective. Here are some takeaways from the Merchant Risk Council's 2023 Global Ecommerce Payments and Fraud ReportOff-site link, which reports on the practices of more than 1,000 merchants that participate in ecommerce located in the North American, European, Asia-Pacific and Latin American regions.

Ecommerce merchants are increasing the types of payments they accept.
Approximately two-thirds of ecommerce merchants accept cards, bank/direct debit transfers, and digital wallets. Over the past year, merchants added more options under digital wallets (37 percent), buy now pay later (25 percent) and mobile commerce payments (23 percent) to their acceptance list. Not far behind was increased acceptance for options under bank transfers/direct debit (19 percent), cryptocurrency (17 percent) and local digital payments (16 percent), such as digital wallets in China and PIX, the instant payments network in Brazil.

Looking at the non-digital payment types, about half of the merchants take cash and 30 percent accept cash on delivery (a separate report category). Both categories were higher than I expected since this data is focused on ecommerce merchants. Cash on delivery has evolved from its name but implies that goods are paid for upon acceptance by the customer. Customers may receive goods by delivery or from a physical location. Payment methods are at the discretion of the merchant or the courier and may include cash, card, check, or mobile payments. From an inclusion perspective, I was glad to see this option is still available to people who need or want to use cash. Cash-reliant people are vulnerable to being left behind in our digital payment world.

Ecommerce merchants are influencing the ways consumers pay.
Merchants make strategic choices to offer payment options. Depending on the option, merchants can incur associated costs and risks. Thus, it makes sense that 90 percent of merchants globally report that they encourage payment methods that help them reduce costs, lower fraud risks, or accelerate funds availability. Merchants use the following top five methods to influence payments choice:

  1. Promote preferred payment methods
  2. Offer preferred payment methods before the checkout page
  3. Provide incentives (such as a discount or rewards) to use preferred payment methods
  4. Pre-select preferred payment methods
  5. Surcharge for non-preferred methods

These methods work best if consumers are shopping directly at the merchant's ecommerce site. Most merchants (77 percent) also use a third-party marketplace, where they generally are unable to influence payment choice. They may also be on the losing end to the same tactics above when purchases are completed on the third-party platform. On my "go-to" third-party marketplace, I am frequently offered a rewards credit card from that retailer with a running rewards balance (now several hundred dollars) that shows me the money I have missed out on by not applying. Do any of these methods influence you to save some money or is it too much of a hassle?

By Lali Shaffer, payments risk expert in the Retail Payments Risk Forum at the Atlanta Fed