Hamburg-based secondary research organization yStats.com has released a new report, “Global Online Payment Methods: First Half 2014“, which reveals that credit cards continue to have the largest share of global B2C E-Commerce payments and are likely to maintain their lead in the near future.
However, the fastest growing alternative methods, digital wallets and mobile payments are increasing their share rapidly, with an annual growth rate of over 40% outpacing other payment methods. Put together, alternative payment methods are forecasted to increase their share of online payments to over 50% by 2017.
Security remains a major issue on the global online payments market. Surveys show that more than a third of Internet users globally who do not shop online cite distrust to online payments as their reason for not making purchases, though this consumer concern varies greatly by country and region.
Moreover, an important trend is integration of payments across various channels. Banks, payment processers, card companies and multi-channel merchants globally are working toward integration of online payments with mobile and POS payment, while mobile wallets start to offer services beyond mobile payments, and merchants increasingly opt for a single payment provider across channels.
Mobile payments, both online and in-store, are predicted to continue strong growth worldwide, with customer adoption improving. About a quarter of the global consumers used their mobile phones for financial or banking transaction last year, and the number of payments with mobile handsets is forecasted to grow rapidly in the next few years to reach several billions by 2018. The region leading worldwide by share of mobile on total B2C E-Commerce payments is the Middle East & Africa.
Competition on the global online and mobile payments market is fierce, with major players developing and employing innovations in recent months. Amazon launched promotion of its Login and Pay processing service for online merchants, while Google launched a prepaid card connected to Google Wallet and plans to expand its payment services further.
Visa and MasterCard added a cloud-based solution to its NFC payment offers, using the Host Card Emulation technology. PayPal, which generated almost EUR 5 billion in revenues in 2013, launched a new branding campaign with focus on mobile. Moreover, expansion into online and mobile payments is anticipated from large players Apple and Facebook.
In the USA, alternative payment methods are expanding to rival debit and credit cards in both online and offline retail. A digital currency trend also continues to evolve. The online retail payment market in the USA grew by a small double-digit share in 2013, reaching several hundreds of EUR billion. M-Commerce payments amounted to a medium-high double-digit figure in EUR billion, split almost evenly between tablets and mobile phones. In Canada, online payment by card continued to be the leading method.