E-wallets to rival cards as preferred payment type
London, January 22, 2014
E-wallets will equal cards as the most popular payment method globally, with each predicted to have a 41 per cent share of the overall payments market, a report said.
In 2012, $295 billion was processed through e-wallet payments. This is set to rise to $1,656 billion by 2017, added ‘Your Global Guide to Alternative Payments (Second Edition)’, an in-depth study of the global payment landscape conducted by WorldPay, the global leader in payment processing, risk and alternative payments.
The study found online purchases made using alternative payments (any form of payment other than credit or debit cards) will rise to 59 per cent in 2017 from 43 per cent in 2012. Card payment market share (including credit and debit) will decline from 57 per cent in 2012 to 41 per cent in 2017.
Key insights from the report include:
• Popular schemes – PayPal has the highest market share of all alternative payment schemes – 57 per cent with China’s Alipay in second place with 20 per cent
• Card-based e-wallets – By 2017, it is estimated that card-based e-wallets will have a 25 per cent share of the card market. New initiatives, such as V.me by Visa, are currently fuelling this growth
• E-wallets in China – 44 per cent of transactions are made using e-wallets in China, with Alipay comprising the greatest market share – 30 per cent of total payments
• Rise of mobile – Mobile ownership is highest in Europe (88 per cent) but smartphone ownership is the highest in North America (54 per cent). Specialised mobile payment solutions will grow as technology advances and smartphone penetration rates rise. The value of mobile transactions will increase to $117 billion by 2017, from $18 billion in 2012
• Cash on delivery in decline – Cash on delivery will decline to just 2 per cent of the payments market by 2017, from 5 per cent in 2012
Shane Happach, chief commercial officer, WorldPay, said: “We’re seeing a transformation in transaction trends. 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 & marketing officer, E-commerce, WorldPay, said: “Emerging economies, such as the BRIC 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. It’s crucial that online merchants work with a payment provider with specialist knowledge of the complicated alternative payment landscape,” he added. – TradeArabia News Service