Globally, Alternative Payment Methods (APMs) inched past card payments for the first time ever with 51% of market share.
It is also likely eWallets will overtake credit cards in the global eCommerce market by 2019.
In its latest Global Payment Report, UK-based Worldpay predicts this gap will widen in 2016 and beyond as more consumers opt for the convenience of “e” payment options over traditional plastic.
Worldpay says not long ago, eWallets were invariably part of a retail giant, such as Alipay (Alibaba) and PayPal (eBay). But no longer. Recently, bank and network wallets have emerged, with Visa Checkout, MasterPass and ChasePay as the forerunners. And there are other players, too, who have entered the market – players who are not, traditionally, in the payments field.
Driven by a need to create customer ‘stickiness’ by integrating their technology into their consumers’ everyday lives, multinationals such as Apple with Apple Pay, Samsung with Samsung Pay and Google with Android Pay are revolutionizing the payments scene.
Global Payment Preferences
(2014 vs 2019)
Credit Cards: 30.3% 23.8%
Debit Card: 20.9% 17,0%
eWallets: 20.5% 26.7%
Charge Cards: 3.1% 1.7%
Prepaid Cards: 2.4% 1.6%
North America Payment Preferences (2014 vs 2019)
Credit Cards: 40% 37%
Debit Card: 25% 22%
eWallets: 14% 21%
Charge Cards: 2% 1%
Prepaid Cards: 2% 2%
Worldpay noted China has been a leading force in the global economy.
The rise of the middle class and the changing consumption habits have driven YOY eCommerce growth.
In the market, the most popular online payment method is Alipay.
What is most interesting in this region is that many domestic alternative payment methods are now recognizing new opportunities, enhancing their product offerings and expanding into neighboring countries and beyond.
This year Alipay has partnered with Walmart China and Uber, to further expand their online proposition into offline payments.
UnionPay has also has been making significant efforts to improve international acceptance by – among other things – providing exclusive privileges in the US and forming partnerships in Germany to ensure ATM coverage. The marketing and product strength of these companies means they can make an impact on new markets in a very short timeframe.
Worldpay predicts the real Chinese winners will be:
Alipay: The Chinese market is set to grow further in the next few years. Alipay will benefit from this growth as the most popular payment method. The payments giant is also expanding rapidly internationally, with a specific focus on Europe and US.
Tenpay: as a result of recent innovation, this payment method is poised to increase its share of Chinese market.
MasterPass: expected to win significant share by adopting a new approach of selective market entry, especially in non PayPal dominated markets and China.
UnionPay: the eCommerce user experience is evolving as the company better understands the eCommerce space. With a strong position in CPT (cardholder present transactions) in China, UnionPay is expected to succeed.
PrePay: the markets where Pre-Paid vouchers have been prevalent are flourishing, though in economies which are historically more credit-driven, consumers are now choosing to take more control over their finances. This is driving a preference for Pre-Paid payment options in historically credit-centric markets. Overall, in these markets the golden age of credit is over – a fact which is precipitating growth in Debit and Pre-Paid payment methods. No longer do consumers want to burden themselves with debt – they are hyperaware of the damaging effect of credit, and their buying behavior has changed accordingly.
For data, background and forecasts on Digital Payments: Search CardWeb.com’s CardFlash® Library of more than 58,000 archived articles; Access CardWeb.com’s CardData® for current and historical Performance, Portfolios, Profiles, etc. Visit RAM Research® (ramresearch.com) for quarterly and annual forecasts covering more than 150 metrics. [complimentary or deeply discounted access to CardWeb.com subscribers].
Additional database resources include CardWeb.com’s CardExecs® – comings & goings of payments movers & shakers; CardWeb.com’s CardWatch® – ears & eyes on marketing globally (57K items); and CardWeb.com’s CardPixes® – form & function of card design (7K items).