Digital Wallets to Represent Half of Global eCommerce Sales by 2023
JACKSONVILLE, Fla.--(BUSINESS WIRE)--Feb. 27, 2020-- Financial services technology leader FIS™ (NYSE: FIS) today released its Worldpay from FIS 2020 Global Payments Report, a comprehensive analysis and forecast of consumer payment trends in 40 countries around the world. The report predicts that digital wallets will represent half of global eCommerce sales by 2023, while “Buy Now, Pay Later” (BNPL) methods emerge as the fastest-growing online payment preference over the next five years.
The Worldpay 2020 Global Payments Report indicates that even as global eCommerce continues to grow to an estimated $5.9 trillion by 2023, the marketplace is rapidly changing as digital and mobile wallets transform consumer behaviors online. Many diverse factors are driving this change, including the urbanization of emerging economies, widescale technological adoption, the increasing spending power of Generation Z consumers, and the rise of social commerce.
Smartphones are becoming the new wallet for many consumers who are forgoing traditional payment methods in-store, according to the Worldpay report. In 2019, 22 percent of in-store purchases globally were conducted using mobile/digital wallets1 – up from 16 percent in 2018.2 Market forecasters project that more than one billion shoppers will make a digital or mobile wallet payment in 2020.3
“Mobile commerce is set to make up half of all global eCommerce spending in five years because the reach and scale of the technology means you can shop and buy anywhere,” said Shane Happach, EVP, head of global eCommerce, Worldpay Merchant Solutions, FIS. “If a merchant’s payment strategy doesn’t consider mobile-first payment methods like digital wallets and ‘Buy Now, Pay Later’ options, they are going to lose market share to their competitors.”
“While innovations like ‘Buy Now, Pay Later’ grow out of consumer demand, new payment methods win market share when retailers and service providers work to educate shoppers about their options,” said Zilvinas Bareisis, Head of Retail Banking, Celent. “It is upon payments service providers and retailers to educate shoppers by talking to them at the register, or through disclaimers along the shopping experience online. These communication tools should be designed in a way that drives awareness as well as adoption.”
Global Payment Trends
While digital wallets are becoming a preferred choice for online and in-store commerce, BNPL methods are rapidly emerging as a global payment option. BNPL payment services such as Afterpay or Klarna allow consumers to delay payment or to pay by installments over a set period.
The FIS report found that BNPL is the fastest-growing online payment method in Australia, Brazil, France, Japan, the Netherlands, the United Kingdom and the United States, and is set to grow at a 28 percent compound annual growth rate globally over the next five years.1 The Europe-Middle East-Africa (EMEA) region leads the global market in terms of BNPL usage, comprising 5.8 percent of total eCommerce purchases and expected to grow to 8.9 percent by 2023.1North America currently comprises less than one percent of eCommerce BNPL purchases and is expected to advance to three percent by 2023.
art of the possible in a mobile-first consumer market, giving new tools to merchants who must open new doors to shoppers looking for more flexible and personalized ways to pay.”