For more than a decade, there has been a steady increase in the popularity of digital solutions – digital shopping, digital services, even digital television. In general, the world has been shifting to favor a digital-based paradigm, but the progress has been slow. However, due primarily to the COVID-19 pandemic, there has been unprecedented acceleration. Jason Simon, a FinTech and eCommerce expert, discusses how the transition is advancing and what is expected over the next few years.
The global pandemic has inarguably changed how consumers view the purchase-making process for all goods and services. This can be seen in the increase in digital consumer platforms that have begun to populate the Internet, but one of the biggest indicators is the performance seen by PayPal over the past year. PayPal President and CEO Dan Schulman took part in an interview for CNN recently and the growth the company has been witnessing shows how impactful digital operations are.
Asserts Simon, “PayPal was one of the first major, private payment solutions that was able to establish itself around the world. It was a slow road to get to where it is today, but the past year has seen an explosive amount of new support for the platform everywhere. Going forward, it is expected that there will be even faster adoption of digital payment solutions and digital commerce platforms.”
PayPal has record growth during COVID-19 while, at the same time, it has been busy helping small businesses through loans and grants. Over the past six months, the platform has onboarded 10% of its total number of merchants, adding 35 million new merchants and consumers in the period. Consumerism is moving toward digital and the eCommerce acceleration that had been expected to take place within 3-5 years took place in less than six months.
In the latter half of 2020, there was 25% growth in digital small business revenue. This was the only segment to report an improvement, as land-based small business revenue continued to fall. Additionally, 75% of digital small business sales outside the business’ home state as more merchants and entrepreneurs began to adopt digital alternatives to keep their operations afloat.
Adds Simon, “Digital is going to be the new normal. Digital trends that were already taking place have accelerated and, even after COVID-19 restrictions are removed, there is going to continue to be more emphasis placed on digital alternatives. It has become the new norm and business executives and commercial analysts everywhere agree that eCommerce is going to take priority moving forward.”
The financial services space is going digital, as well. According to surveys, up to 70% of consumers now favor digital currency over traditional solutions. Asserts Simon, “Paper money is slowly going away and digital currency is going to take over, in one form or another. This could be through cryptocurrencies, such as Bitcoin or Ether, or it could be through other forms of electronic money. However, the end result is the same. Digital money, just like digital shopping, will be the future.”