Online commerce payments are growing sharply in developed countries, but in North America there is angst among consumers with cybersecurity.
China overtook the US as the world’s largest online commerce market two years ago, with Chinese consumers spending a total of $699 billion online in 2015. About 20% of the total value of online commerce transactions across all markets will be accounted for by m-commerce by 2020, with the market recording a compound annual growth rate of 17% from 2015 to 2020.
Consumer spending patterns online have shifted over the past three years to a wider range of merchant categories. The market is no longer dominated by high-ticket goods categories to the same extent it has historically been.
Online consumer payments remain the biggest growth market in payments, and will continue growing strongly as more consumers gain access to the internet and to tools that can be used online. Developing countries – particularly China – are expected to be at the forefront of this growth, although even the most developed online commerce markets will grow strongly over the next five years.
Nevertheless, American Express, MasterCard and Visa far outpace other payment methods such as online debits and e-Wallets in North American e-Commerce. Considering the two countries together, more than two-thirds of online consumers prefer credit cards over other payment methods.
One payment method that is expected to see considerable future growth in the region is mobile payment. Currently accounting for only a small percentage of retail purchases, but shoppers are warming to the concept of mobile payments linked to the major credit cards.
A major concern for consumers is the security of their payments, whether by credit card or one of the innovative methods. One half of U.S. respondents to a recent survey indicated a wariness regarding credit card or other online payment when shopping online. Merchants and credit card companies are searching for a solution to the growing incidence of fraud in online retail, including biometrics such as fingerprint scanners.