Online purchases made using alternative payments – any form of payment other than credit or debit cards – will rise to 59% in 2017 from 43% in 2012, while card payment market share including credit and debit will decline over the same period from 57% to 41% predicts WorldPay.
The payment processing specialist makes the prediction in the just-published second edition of its publication ‘Your Global Guide to Alternative Payments’, which reviews the global payments landscape.
Among its predictions is that electronic wallets (e-wallets) will equal cards as the most popular payment method globally, with each predicted to have a 41% share of the overall payments market. In 2012, US$295bn was processed through e-wallet payments, a figure set to rise to US$1,656bn by 2017.
Among other key insights from the survey:
- Popular schemes: PayPal has the highest market share of all alternative payment schemes at 57% with China’s Alipay in second place with 20%.
- Card-based e-wallets: By 2017, it is estimated that card-based e-wallets will have a 25% share of the card market. New initiatives, such as V.me by Visa, are currently fuelling this growth.
- E-wallets in China: Forty-four per cent of transactions are made using e-wallets in China, with Alipay comprising the greatest market share at 30% of total payments.
- Rise of mobile: Mobile ownership is highest in Europe (88%) but smartphone ownership is the highest in North America (54%). Specialised mobile payment solutions will grow as technology advances and smartphone penetration rates rise. The value of mobile transactions will increase to US$117bn by 2017, from US$18bn in 2012.
- Cash on delivery in decline: Cash on delivery will decline to just 2% of the payments market by 2017, from 5% in 2012.
“We’re seeing a transformation in transaction trends,” said Shane Happach, chief commercial officer, WorldPay. “Credit and debit cards have long dominated as the payment method of choice for online transactions. Now, alternative payment methods are forecast to grow significantly faster than total e-commerce and will represent more shopper spend than cards by 2017.”
Kevin Dallas, chief product and marketing officer, e-commerce, WorldPay, added: “Emerging economies, such as the BRIC [Brazil, Russia, India and China] countries and the next layer of emerging markets, are seeing particularly fast growth of alternative payments. This means the complexity of the payment landscape will increase further. Merchants will need to ensure they understand diverging regional and sector trends in preferred methods of payment.”
The guide can be downloaded at www.worldpay.com/global-guide-to-alternative-payments.
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