Alternative payments set to rise while credit cards fall as preferred payment methods
Credit and debit cards may be the preferred way to pay online in 2013, but that’s all set to change over coming years, a new report suggests.
While payment cards accounted for well over half (57%) of internet payments in 2012, that’s set to fall to 41% by 2017, according to a WorldPay
report, Your Global Guide to Alternative Payments (Second Edition)
, launched today. Alternative payment methods will gain ground instead, and are set to used in 59% of payments, up from 43% in 2012. Predominant among those alternatives is PayPal, which currently has 57% of the market.
“We’re seeing a transformation in transaction trends,” said Shane Happach, chief commercial officer at WorldPay. “Credit and debit cards have long dominated as the payment method of choice for online transactions. Now, alternative payment methods are forecast to grow significantly faster than total e-commerce and will represent more shopper spend than cards by 2017.”
The use of alternative methods will grow predominantly in emerging markets, says Kevin Dallas, chief product and marketing officer, ecommerce, at WorldPay, who says the changes will increase the complexity of payments. “Merchants will need to ensure they understand diverging regional and sector trendsin preferred methods of payment,” he said.
The use of e-wallets will also grow quickly, according to the WorldPay report, which estimates that by 2017 card-based e-wallets will have a quarter (25%) of the card market. Already 44% of ecommerce transactions in China are made using e-wallets. Alipay accounts for 30% of those payments.
Mobile payments are also set to grow quickly as ownership of smartphones rises. Currently 88% of Europeans own a mobile phone, but the largest smartphone market is North America, where 54% own one. WorldPay predicts mobile transactions will rise in value to $117bn (£70.6bn) by 2017, up from $18bn (£10.9bn) in 2012.
The use of cash is set to fall in coming years, the report predicts. In 2012, 5% of all payments were made by cash on delivery, but that’s expected to fall to 2% by 2017.