Hey there!

As we say goodbye to 2024 and step into 2025, we want to take a moment to express our heartfelt thanks to each of you—our 3,000 subscribers—for being part of our journey this year. Your support and engagement are what make our weekly updates possible, and we are so grateful to have such a dedicated community.

In this final edition of the year, we’re diving into how small businesses are using cutting-edge technologies like AI and embedded finance to thrive, plus we’re taking a look at the exciting trends shaping the future of eCommerce in 2025.

We’re excited to continue bringing you the latest insights, and we look forward to another year of sharing news, trends, and opportunities together.

Wishing you all a successful and prosperous New Year!

ECOMMERCE AI

2024 Changed the Game for Small Business Growth Opportunities

Main Street is getting a digital upgrade, and small to medium-sized businesses (SMBs) are emerging as big winners.

Overcoming post-pandemic recovery and economic uncertainties, SMBs are now leveraging embedded finance, artificial intelligence (AI), and digital transformation to redefine how they operate, compete, and scale. These technologies enhance efficiency, improve customer experiences, and unlock new revenue streams.

Embedded Finance: Revolutionizing Access

Embedded finance simplifies lending, payments, and insurance by integrating them directly into SMB workflows.

• 37% of SMBs prefer providers offering embedded lending options.

• Data sharing boosts tailored credit solutions, enabling SMBs to borrow more and achieve greater satisfaction.

This tech levels the playing field with enterprise-grade tools like digital wallets and BNPL options, helping SMBs compete in the digital economy.

AI: The New Equalizer

AI tools help SMBs streamline tasks, personalize interactions, and optimize finances.

• 96% of SMBs using AI report efficiency gains.

• AI enhances cash flow forecasting and fraud detection, offering enterprise-grade security.

From marketing automation to backend operations, AI helps SMBs save time and resources.

Embedded finance and AI thrive on a foundation of digital transformation. Automating back-office operations like payroll and accounts payable ensures compliance and preserves cash flow, creating a cycle of innovation and growth.

SPONSORED BY OMNISEND

Join over 80,000 Shopify stores using Omnisend to boost sales with email & SMS

Looking for an easier way to create emails that really stand out?

Want to grow your email list with pop ups and landing pages that actually work?

How about a solution that helps you boost sales with personalized, well-timed emails and SMS then?

Omnisend is your all-in-one email and SMS marketing app, made just for Shopify merchants who want to reach more customers and boost sales.

So how does it work?

• You can easily create high-converting campaigns using hundreds of pre-made templates—no coding needed!

• Automate workflows like abandoned cart reminders and welcome emails with just a few clicks.

• Grow your list with exit-intent popups, fun spin-to-win forms, and other engaging tools.

• Plus, gather and display product reviews to build trust and encourage more sales.

Trusted by over 80,000 users and backed by 5,100+ five-star reviews, Omnisend makes marketing easy, letting you focus on growing your business.

Boost your sales with Omnisend—sign up today to see the difference!

ECOMMERCE TREND

Retailers Resolve to Even Up Online and In-Store Experiences in 2025

The holiday season boosted merchants' revenues, but sustaining momentum—especially in brick-and-mortar stores—remains a challenge.

The PYMNTS Intelligence report “2024 Global Digital Shopping Index: U.S. Edition”, created in collaboration with Visa Acceptance Solutions, highlights the rise of Click-and-Mortar™ shoppers—consumers who integrate digital tools into their in-store shopping. Key insights include:

• 19% of U.S. consumers prefer using digital tools while shopping in-store.

• 11% opt for online purchases with in-store pickup.

• 75% of shoppers expect stores to support their preferred payment methods.

The Importance of Payment Flexibility

Holiday spending data from Visa revealed that 77% of payment volume occurred in stores, up 4.1% year-over-year. Yet, rising card debt (averaging over $5,000 per consumer) makes staggered payment options essential.

• 43% of consumers say availability of pay-later options influences retailer choice.

• Shoppers using general-purpose card-linked installment plans spend twice as much compared to those using standalone BNPL.

Two-thirds of card users shop with brands offering rewards programs, yet 38% of consumers are unfamiliar with these programs. Retailers can boost engagement by integrating rewards visibility earlier in the shopping journey.

82% of merchants report growth in the use of card-based installment options during in-store checkouts, making installment plans a key strategy to increase conversions.

ECOMMERCE TECH

45% of U.S. Online Merchants Want One-Click Checkout Solutions

One-click checkout solutions have become a top priority for 45% of U.S. online merchants, according to the PYMNTS Intelligence and Mastercard collaboration, “The Role of PSPs in the Checkout Experience: U.S. Edition.” 

This feature is viewed as a powerful tool to increase conversion rates by streamlining the checkout process and enhancing customer experience.

Conversion Rates Drive Demand

The report highlights that nearly 72% of merchants prioritize technologies that improve conversion rates. Among these:

• 44% cite higher conversions as the most important factor in their requests to payment service providers (PSPs).

• 18% more merchants rank conversion optimization above ease of integration with current systems.

Many U.S. eCommerce merchants face significant challenges, including abandoned carts and long checkout times. Simplified checkout solutions, like one-click checkout and secure card-on-file features, can mitigate these issues and move customers from intent to action.

• 27% of carts are abandoned due to slow and complex checkout processes, according to Jennifer Marriner, Mastercard’s EVP of global acceptance solutions.

• Tools like Click to Pay can reduce checkout times by 50%, boosting conversion rates.

Other companies are also stepping in to enhance the checkout experience:

• PayPal’s Fastlane leverages email recognition to complete purchases in as little as one click, minimizing guest checkout friction.

• Bolt’s partnership with Checkout.com delivers seamless shopper experiences, emphasizing higher conversions.

With streamlined checkout tools becoming the norm, merchants are poised to capture more sales and provide frictionless customer journeys.

ECOMMERCE PAYMENT TRENDS

Legacy Tech vs. Instant Payments: The Cash Flow Race of 2025

The shift toward real-time payments (RTP) continues to reshape banking and payments, pushing the industry to match the speed of digital interactions seen in other sectors.

RTP Adoption and Progress

Jim Colassano, Senior Vice President of RTP Product Development at The Clearing House (TCH), highlighted the dramatic growth of RTP since its launch seven years ago. With a transaction limit increase to $10 million starting February 2025, businesses are better equipped to access funds quickly, streamline cash flow, and strengthen supplier relationships.

• Key Growth Areas:
  

  • Payroll applications, including gig-worker instant wage access

  • Frequent payroll cycles replacing traditional biweekly setups
    

• Fraud Mitigation: Leveraging ISO 20022 messaging standards, RTP provides enriched data for real-time fraud detection. Unlike check payments, the RTP network has shown minimal fraud cases, thanks to robust monitoring tools.

Instant Payments: Opportunities and Challenges

Cross-Border Payments: A proof of concept by TCH and EBA Clearing demonstrated near-instant cross-border transactions settling in under 30 seconds. However, global adoption will require regulatory alignment and a business framework.

Legacy Infrastructure Hurdles: ERP systems and outdated tech remain barriers for many businesses. Yet, growing customer demand is expected to accelerate modernization efforts.

Colassano predicts that as demand for RTP solutions grows, technology providers will quickly adapt, enabling businesses to embrace faster, more efficient payment processes.

Prepare for the future: Companies investing in modernized payment infrastructure today will be well-positioned to thrive in the increasingly real-time financial ecosystem of tomorrow.

ECOMMERCE SALES

Amazon vs Walmart: The Battle for 2025

As 2024 concludes, the rivalry between Amazon and Walmart remains a defining force in retail.

Key moments from the year illustrate their ongoing competition for consumer loyalty and market leadership:

• Market Share: Amazon leads with 10% of U.S. retail sales, while Walmart holds 7.3%.

• Digital Advertising: Walmart expanded its Walmart Connect, and Amazon reduced Prime Video ad prices to attract more advertisers.

• Membership Growth: Amazon Prime dominates with a 67% penetration, while Walmart+ grew to 30%.

• Sales Events: Prime Day set records with $14 billion in sales, while Walmart+ Week saw a 71% participation boost, with Walmart shoppers spending more per person.

• Innovation: Walmart is implementing digital shelf labels, and Amazon refined its Just Walk Out technology.

• Price Wars: Both companies rolled out aggressive discount strategies, with Amazon adding low-cost items from China, and Walmart hosting its "largest savings event ever."

Looking ahead, both companies are set to innovate further, with Amazon’s MK30 delivery drone and Walmart Realm, a gamified marketplace, positioning them for continued success in 2025.

Key areas to watch: membership renewal rates, ad strategies, and responses to external pressures like tariffs.

Signing off,

The Merchant @CartHustle