E-wallets will rival cards as the most popular payment method globally in the next three years, according to a new study by WorldPay, a global leader in payment processing, risk and alternative payments.
WorldPay’s Your Global Guide to Alternative Payments (Second Edition), a study of the global payment landscape, found online purchases made using alternative payments (any form of payment other than credit or debit cards) will rise to 59% in 2017 from 43% in 2012.
Card payment market share (including credit and debit) will decline from 57% in 2012 to 41% in 2017.
Of all alternative payment schemes, PayPal has the highest market share at 57%, said WorldPay. China’s Alipay is in second place with 20%.
Card-based e-wallets are tipped to take a 25% share of the card market by 2017 with new initiatives, such as V.me by Visa, currently fuelling this growth.
E-wallets are most popular in China, where they account for 44% of transactions. Alipay dominates the market, representing 30% of total payments.
Mobile is forecast to grow too, said researchers. Mobile ownership is highest in Europe (88%) but smartphone ownership is the highest in North America (54%). Specialised mobile payment solutions will grow as technology advances and smartphone penetration rates rise and the value of mobile transactions will increase to $117bn by 2017, from $18bn in 2012, said WorldPay.
Cash on delivery will decline, however, to just 2% of the payments market by 2017, from 5% in 2012.
Shane Happach, chief commercial officer, WorldPay, said: “We’re seeing a transformation in transaction trends. 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.”
Kevin Dallas, chief product & marketing officer, e-commerce, WorldPay, said: “Emerging economies, such as the BRIC countries and the next layer of emerging markets, are seeing particularly fast growth of alternative payments. This means the complexity of the payment landscape will increase further.
“Merchants will need to ensure they understand diverging regional and sector trends in preferred methods of payment. It’s crucial that online merchants work with a payment provider with specialist knowledge of the complicated alternative payment landscape.”