Alternative payments to overtake credit and debit card payments globally by 2017
Mobile payments will gear up to rival traditional credit and debit cards by 2017, as consumer trust in mobile device security increases.
E-wallets will equal cards as the most popular payment method globally, with each predicted to have a 41% share of the overall payments market. In 2012, $295 billion was processed through e-wallet payments. This is set to rise to $1,656 billion by 2017, according to a new study.
WorldPay, provider of payment processing, risk and alternative payments today launched an in-depth study of the global payment landscape. The study 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 marketshare (including credit and debit,) will decline from 57% in 2012 to 41% in 2017.
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. The value of mobile transactions will increase to $117 billion by 2017, from $18 billion in 2012.
The report also showed that PayPal has the highest market share of all alternative payment schemes at 57%, with China's Alipay in second place with 20%. Altogether 44% of transactions are made using e-wallets in China, with Alipay comprising the greatest marketshare at 30% of total payments.
By 2017, it is estimated that card-based e-wallets will have a 25% share of the card market. New initiatives, such as V.me by Visa, are currently fuelling this growth.
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 and marketing officer, e-commerce, WorldPay, added:, '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.'