Report: Alternative Payments to Account for 55% of Global E-Commerce Sales by 2019
Dec. 3, 2015
By 2019, alternative payment methods will account for 55 percent of global e-commerce sales with e-wallets surpassing credit cards as the most popular online payment method, according to a new report from e-commerce acquirer and processor Worldpay. And, even though North America is a mature e-commerce market where credit cards dominate, it will be the region that sees the most growth in alternative payments, rising from 28 percent of e-commerce sales in 2014 to 35 percent in 2019. While Worldpay expects alternative payment growth will be strong, the London-based company acknowledges those methods (which include bank transfers, direct debits, cash on delivery, e-invoices, e-wallets, prepaid, postpaid, carrier billing and digital currencies) have not grown as quickly as they had thought.
“In our previous report we predicted that alternative payment methods would account for 59 percent of all e-commerce turnover by 2017,” the authors wrote in Worldpay’s Global Payments Report. “Although alternative payments are undoubtedly on the rise, they have not grown as fast as originally predicted. This is mainly due to delayed launches of key card scheme’s e-wallet initiatives which were expected in 2013. Another important factor is that UnionPay has moved more slowly than anticipated in the Chinese e-commerce market, which is still dominated by AliPay.”
During the five year period between 2014 and 2019, Worldpay expects alternative payment methods to grow and payment-card usage to decline in every major region around the world. Cards, it said, will remain strong in North America (though the amount of online sales they account for will drop from 72 percent to 65 percent) and Latin America (75 percent in 2014 to 71 percent in 2019). The company predicts online sales via e-wallets to grow from $387 million last year to $647 million in 2019 (credit cards will grow slightly from $573 million last year to $577 million in five years). And, the report identifies Tenpay, MasterPass, UnionPay and prepaid vouchers as likely beneficiaries of the global migration toward alternative payment methods.