Worldpay’s 2017 Global Payments Report finds that despite increased use of alternative payment methods, the North American e-commerce market has the slowest growth rate in the world
The e-commerce market continues to grow in the U.S., impacting how people make payments – the use of e-wallets surpassed debit cards in the U.S. by 7 percent in 2017, and within the next five years, is set to overtake credit cards as the leading payment option, according to Worldpay’s latest report.
Worldpay’s 2017 Global Payments Report analyzed 36 countries across the world to gauge the current state of the payments industry and to predict future trends on a global and domestic scale. The findings show the global e-commerce market is expected to grow 11.1 percent over the next five years, with e-wallets predicted to become 45.9 percent of the market by 2021. The U.S. e-commerce market is set to grow by 9.8 percent – an overall yield of $1,077.5B in 2021.
China, the U.S. and the U.K. continue to be the dominant e-commerce players in 2017, but are not growing as quickly as past years. Despite being a top market, North America has one of the slowest growth rates at 10 percent1. In comparison, Latin America is the fastest growing e-commerce region, growing at a CAGR rate of 19 percent2, followed closely by Asia-Pacific at 12 percent3, and EMEA at 10 percent4. Argentina is also set to have a boom in e-commerce: expected to grow at an annual rate of 24 percent for the next five years, surpassing Brazil and Mexico by 7 and 17 percent, respectively.
Once again, Worldpay’s annual report found alternative payment methods are gaining more ground in the ecommerce market. E-wallet payments (39.2 percent), bank transfers (11.6 percent), prepaid cards (0.2 percent) and e-invoices (0.1 percent) are all expected to increase in use across the world. This global trend holds true in the U.S. E-wallets, such as PayPal, are the second most used payment method by Americans and are set to become the top payment option with a 46 percent usage rate by 2021, followed by credit cards, bank transfers, deferred credit cards and debit cards. E-wallets ranked as the third most popular payment method in the U.S. in the 2016 Global Payments Report, therefore, its second place standing in the 2017 report marks a significant change in consumer payment preferences.
Although alternative payment methods continue to gain steam in the U.S. e-commerce market, security remains a top concern for consumers when it comes to online purchases. While 76 percent of Americans have access to the internet, nearly 33 percent of households avoid online payments due to concerns over data security – a potential explanation for North America’s slow e-commerce growth rate. Currently, credit cards remain the favorite payment method for online shopping, but that could easily change with the rapid growth of mobile payments. Mobile payment providers, such as Apple Pay, Samsung Pay and Android Pay, are gaining more acceptance and earning consumers’ confidence as their popularity and usage increases.
“The adoption of mobile payments in the U.S. has been gradual, but we’re finally seeing its popularity grow with consumers,” says Casey Bullock, General Manager, North America, Global eCom at Worldpay. “People of all ages are becoming more familiar with the technology, and are also becoming more confident in its security. As niche payment options continue to take off, businesses will have to adapt – updating both in-store and online payment options to accommodate for the changing consumer preferences in all of the markets they operate in and the new sales channels that come with them.”
About The 2017 Global Payments Report
This report has been compiled using a mixture of primary and secondary data sources. Primary refers to our own surveys and commissioned research; whereas secondary refers to authoritative third-party vendor data, and other publicly available data. The report also draws upon Worldpay’s decades of experience in providing global eCommerce solutions. The eCommerce projected growth figures contained in this report were sourced from GlobalData’s E-Commerce Analytics database and relate to the eCommerce industry as a whole, not Worldpay’s business. GlobalData collected this data using consumer surveys, B2B surveys and desk research. Any indicative predictions based on the data we have used should be treated as such.
Worldpay is a leading payments company with global reach. We provide an extensive range of technology-led payment products and services to over 400,000 customers, enabling their businesses to grow and prosper. We manage the increasing complexity of the payments landscape for our customers, allowing them to accept the widest range of payment types around the world. Using our network and technology, we are able to process payments from geographies covering 99% of global GDP, across 146 countries and 126 currencies. We help our customers to accept more than 300 different payment types, by providing an end-to-end service including acquiring, treasury, gateway, alternative payments and risk management, all via a single integration to Worldpay. Worldpay makes global payments simple for many of the world’s leading organizations. For more information, visit www.worldpay.com/global.
1 GlobalData, refers to Canada and U.S.
2 GlobalData, refers to Argentina, Brazil, Colombia, and Mexico.
3 GlobalData, refers to Australia, China, Hong Kong, India, Indonesia, Japan, Malaysia, New Zealand, Philippines, Singapore, South Korea, Taiwan, and Vietnam.
4 GlobalData, refers to Belgium, Denmark, France, Germany, Italy, Netherlands, Nigeria, Norway, Poland, Russia, South Africa, Spain, Sweden, Turkey, United Arab Emirates, and the UK.