How consumer payment preferences are shaping commerce
WORLDPAY EDITORIAL TEAM
July 10, 2019
Changes in consumer payment preferences are having significant effects on commerce. While you’ve probably observed some of these shifts, it will pay to have a deeper understanding of the latest payment trends and consumer behaviors. Here’s a look into our 2022 edition of The Global Payments Report and what it revealed about consumer payment preferences including what that means for your customers’ wallets and your own bottomline
The digital connection
During the pandemic – and perhaps as a result of it – we watched the world embrace peer-to-peer payment (P2P) services like Cash App, Venmo and Zelle. As consumers turn to these and other digital payment methods and away from handling cash, merchants will do well to open their businesses to mobile wallets. We found that mobile wallets took a 50% share of global e-commerce transaction value in 2022 and are projected to reach nearly 53% share by 2025.
Although digital payments are fast becoming a preferred payment the world over, cash hasn’t left the building just yet. Hard currency is still an important part of global payments, accounting for 18% of transaction value in 2021. However, looking into the future, we forecast a steady decline in cash and an ever-growing population of digital consumers.
Apps have gone super
One significant trend driving digital payment adoption is the rise of super apps. Super apps, a mobile application that combines multiple functions including payments and digital transactions, are quickly gaining consumer demand – and market attention. As giants like Apple and Walmart maneuver with the likes of PayPal, Venmo, Amazon and others, super app-status may be key to maximizing (and monopolizing) the customer’s payment journey.
These one-stop portals are also feeding a new trend toward in-app activity. In 2020, eMarketer reported that US smartphone users spent four hours on the internet each day – 88% of them in apps, not on browsers. We recommend that merchants explore the growing competition from super apps and develop strategies to either work with them or compete against them.
The immediacy of BNPL
Buy now, pay later (BNPL) is a payment method that allows the customer to make and receive a purchase immediately while paying for it over a series of installments. And it’s become the fastest growing payment method in both e-commerce and POS. While expanding in every region worldwide, our report projects that BNPL will account for over US$1.3 trillion in transaction value across e-commerce and POS by 2025.
Appealing to younger generations, BNPL offers the benefits of flexible and immediate purchasing power, often without the financing processes associated with credit. A recent survey by PYMNTS found Gen Z to be almost twice as likely – and Millennials nearly five times as likely – to use BNPL services compared to older consumers. And merchants can appreciate the higher conversion rates that come from offering consumers convenient payment options. We suggest you consider BNPL services as part of both e-commerce and POS checkout to increase sales and improve customer satisfaction and retention.
A new world of payments
If you’re interested in learning more about the latest payment trends and putting the insights of The Global Payments Report to work for your business, you can download the report here.