Gone are the days of in-store or online. Retail commerce – even in-store – has transformed almost completely into digital commerce. Whether it's the purchases themselves or the payment methods, digital platforms are now an integral part of the retail experience. This allows for brands with global aspirations to scale quickly. But that is easier said than done.

In many parts of the world, digital transformation represents the growth of social economic consumer groups, internet infrastructure, and the prolific usage of smartphones. In more established economies, these factors have enabled a range of transactions and payment methods that we can now recognize as forms of e-commerce.

But these trends are in different stages in different regions. Businesses of all kinds need to match their payment capabilities to the regions in which they operate, ensuring the solution offered matches the market.

The New Commerce, From E to M

There is no longer a distinct line between "traditional" retail and e-commerce. Whether shopping online or in-person, for household supplies or clothing, traditional purchase behavior tends to be routine and considered (as opposed to a one-off purchase). And such transactions are almost invariably conducted with a preferred payment method.

Apps have enabled pre-programmed transactions with automated payment authorization. In fact, apps have been found to convert three times better than mobile websites. Uber and DoorDash have built their business around this on-demand model powered by apps that function like commerce utilities - these tend to be more spontaneous purchases made whenever the need arises.

Apps have also bridged the gaps across these models. Beside their standard POS business, Starbucks and McDonald's enable mobile orders using attached accounts for payments, with real 'brick-and-mortar' fulfillment.

These models require electronic connectivity and, in almost all cases, cannot be performed with cash.

Cards? Who Needs Cards?

While plastic cards may be used like cash, this payment behavior is quickly being supplanted by even more convenient payment methods. Credit accounts connected to store accounts are the norm in North America, with Amazon's one-click purchase capability being the pinnacle in convenient, connected commerce.

Such transactions are thought of as "pull" transactions, since they pull the necessary funds from a store of value somewhere else. In this case, the web browser serves as the "wallet."

This purchase behavior is common on phones as well. But m-commerce can also be conducted with "push" transactions that authorize payments from a range of connected accounts. This is extremely popular in Asia, frequently utilizing QR payments. Enabling such local payment preferences is critical for conducting m-commerce in these regions.

It's worth noting that app-based m-commerce is extremely effective in driving conversions because shoppers engage with their phones in such a habitual way: messaging, scrolling through social and news feeds, playing games (which are themselves often a form of m-commerce with their in-app purchases.) This almost reflexive behavior lowers barriers to purchase, as does completing purchases utilizing local preferred payment methods.

NFC "touchless" payments systems have been the standard in the EU and UK for some time. These might involve phones or "cards" but tap into a range of payment methods. The regional nature of these patterns underscores the importance of familiarity that is the foundation of local convenience.

Banks As Brands, Not Places

As electronic platforms enable increasingly efficient commerce, the distinctions between banks and payments companies are beginning to blur, with digital payment platforms beginning to function like banks. The implications for e-commerce and m-commerce are that purchase transaction behavior will become even more reflexive. This also means the relationships between the local payment methods and the consumers who use them will become even tighter. This, in turn, means that merchants conducting cross-border commerce or serving international clientele need to tap into these systems.

In fact, the change to more convenient electronic payment methods tends to be driven by habits adopted in youth. This means the move to truly cashless commerce that does not rely on credit cards is inexorable and will accelerate, relying on a growing range of electronic local payment methods. 

Retailers looking to succeed in this world will need to look past their websites or even their apps, all the way into their customers' wallets.