The key message for merchants all over the world is that one size does not fit all.
There is a strong imperative for e-commerce businesses large and small, to organise themselves to be able to accept a whole host of local payment methods and services, to ascertain which suit their customer-base best, and to be able to adapt accordingly.
Boku’s 2024 Global E-commerce Report: The Changing World of Payments in association with Juniper Research analyses data from 37 major markets and highlights global, regional and country-specific trends.
Payments Cards & Mobile picks out key data and translates these into clear guidance for merchants worldwide.
The findings highlight the sustained proliferation of local payment methods in regions all over the world, the continued appetite of consumers for the convenience and flexibility of, for example Buy Now Pay Later (BNPL), and the vital government support – that there is and needs to be – to support the evolution and creation of healthy payment ecosystems.
Account-to-Account (A2A) payments stood out as the strongest growth category, “gaining enormous traction” in both volume and value of e-commerce transactions, the report states, and by volume these look set to grow by 115% by 2028.
By value, too, A2A is projected to double from 8% of all e-commerce transactions globally, to 16% by 2028.
Cards take a hit
Of course, cards take a hit as these growth areas are away from traditional card payments, however perspective must be applied twofold:
Cards are still expected to maintain an almost double share of all e-commerce transactions by volume globally in 2028 than A2A (30% compared to the 17% (which constitutes 115% growth from 2023’s figure of 8%)), albeit 30% would be a decline from 41% in 2023;
The blow will be counterbalanced by growth in card-linked wallets, particularly in developed markets where Apple Pay and Google Pay have high use.
Asia Pacific leads the charge in adoption of local payment methods, as previously highlighted by PCM, and by 2028 it is projected that local payment methods within Asia Pacific will represent 69% of e-commerce transactions by value, from 64% in 2023.
Similarly, by 2028, the report projects that over 61% of all individuals within Asia Pacific will actively use local payment methods on a regular basis.
Musings for merchants
A word on offering choice: merchants should and will have the means to identify how their customers wish to transact.
E-commerce users tend to alternate between several payment methods (and as our European overview calls out, there is greater variety in demand in e-commerce than at physical POS and merchants – happily- are responding accordingly.
By way of example, according to the report, users in India used on average 4.8 payment methods over one month period per user.
Regional variance: for merchants who operate internationally, which is likely to be a goal for many if not already doing so, the preferences in one market are not likely to be replicated in another.
Thus, alongside jurisdictional considerations, gaining market knowledge regarding payment culture alongside the ability to adapt and adopt accordingly, is absolutely crucial for success.
It’s actually not about the payment: the payment method itself is not likely the key hook for your customer.
Beyond the product or service being sold, the payment means is taken for granted. While the absence of preferred payment method can lead to an abandoned sale, which will be an issue front and centre for merchants, the real key is in the experience.
As the report identifies, cost is not a differentiator for the consumer as they are used to not paying for any particular payment type.
This needs to be absorbed by the merchant. The process needs to be simple, clear and quick- offering the choices and channels through which they wish to transact.
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