Mcommerce is set to grow by 70% across the next five years as smartphones – and their wallet capabilities – become a key part in an increasingly omni-channel post-pandemic retail landscape.
According to a study by Juniper Research, mcommerce payments are set to reach as high as $3.1trn by 2025, up from $2.1trn in 2020, driven by the pandemic’s massive boost to digital wallet services in the offline world as well as the increasing use of ecommerce on mobile in the online world.
The research, eCommerce Payments: Emerging Trends, Opportunities & Market Forecasts 2020-2025, also found that the two single largest ecommerce markets, China and the US, will see volume growth in smartphone payments for remote goods of 55% and 74% respectively, between 2020 and 2025.
In China, eWallet payments are well established, with eCommerce continuing to grow, as availability and prosperity rise. In the US, OEM Pay wallets and PayPal will be the major beneficiaries of a permanent pandemic-driven shift to online shopping. The research recommends that payment processors prioritise wallet acceptance for the most popular wallets in target countries at both the online and offline point of sale, or risk missing out on this huge opportunity.
The researchers also anticipate that this uptick in mcommerce will translate into rapid growth of new payment models, such as BNPL (Buy Now, Pay Later). Deploying BNPL via APIs in checkout processes will mean a significant shift away from traditional fee- and APR-based credit card models of consumer financing for online purchases, particularly amongst millennials less convinced of the benefits of credit card ownership. BNPL also offers significant advantages to merchants as a way to increase average basket size, whilst boosting the user experience for shoppers.
Research author Susannah Hampton says: “It is critical for payment processors to prioritise building technological ecosystems to allow the acceptance of BNPL across all payment methods, or they will be left behind by more digitally-adept providers.”