Cash and cards still rule the roost, but alternative payments are catching up, says report

wallets

A new Research and Markets report on global payment trends has found that, whilst card payments and cash-on-delivery still dominate e-commerce, mobile payments and digital wallets are fast on the rise.

In North America, nearly three quarters of B2C e-commerce transactions were found to be paid for by card, with the remaining 25% dominated by digital wallets. In Canada, credit card payments are far and away the most popular payment methods, with Paypal coming a distant second. However, in Latin America, where credit cards are less frequently available, online systems such as Pago Facil and Rapi Pago were found to play an important role in e-commerce – but cash on delivery remained the most common payment method after cards, especially in Argentina and Mexico. Similar trends could be found in Russia and the Czech Republic, and throughout Africa and the Middle East. In India, cash on delivery far exceeds card payments, although this is expected to decrease in the coming years.

Despite the preference for plastic, alternative payment methods and digital currencies such as Bitcoin were found to be gaining traction across the USA – both online and offline. In Europe, where card payments currently account for more than half of B2C e-commerce transaction, legislative efforts by the EU are actively encouraging the growth of third party payment providers. Throughout the continent, 20% of payments are forecasted to involve mobile and e-wallets by 2020, whilst alternative payment industry revenues are expected to grow by half. The UK and Netherlands appear to be leading the way on this front; the percentage of British consumers using alternative payment methods is now well into double digit figures, whilst more than half of Dutch B2C transactions were made using iDeal, a local online banking system. Bucking the trend, card payments accounted for less than a fifth of German e-commerce – most, in fact, use invoices.

Perhaps unsurprisingly, the staunchest supporters of alternative payments are China and Japan. In Japan, unique alternative payment methods proliferate, whilst in China, the mobile payments industry boomed during 2013, growing 7-8 times as fast as the previous year. Online and mobile third party payments now dominate the country’s e-commerce sector, and the trend is expected to continue across the Asia-Pacific region.

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