When digital merchants are planning their future investments, few of them will look back to the mid-19th century for inspiration.
But, when it comes to their payment capabilities, a new white paper from local payment specialists Boku suggests they should read up on the work of Carl Menger – the founder or the Austrian School of Economics, who was born in 1840 and produced his most influential work in the 1880s.
Building on the theories of the classical British economists and their obsession with the objective costs of production, Menger added an all-important human dimension, zeroing in on the ever-shifting attitudes, expectations and preferences of real-life consumers.
And this led him to an investigation of money and payment systems.
Up until Menger’s time, it was assumed that money – and payment systems – had been imposed by the state.
No, he argued, payment is a social phenomenon.
Just like language, it has evolved to facilitate interactions between real people. And it will continue to evolve – as buyers and sellers gravitate towards the optimum combinations of simplicity, efficiency, security, and cost.
Payment will never be static, said Menger.
As the human condition evolves, so too will payment systems. If consumers see the option of a more convenient form of payment, they will automatically gravitate towards it.
And, argues Boku in its white paper, you can see this reality playing out across the world today – because people are not just gravitating away from cash, they are also gravitating away from card-based digital payments.
To demonstrate the speed and the scale of the shift, Boku worked with Juniper Research to analyse e-commerce payment data from 37 major markets worldwide.
Together, they highlight global, regional, and country specific trends, and present mid-term forecasts.
And they conclude that, across the world, consumers are rapidly adopting new payment preferences and exhibiting new behaviours.
By 2028, card-based payment, including card-linked wallets, is set to account for just 41% of global ecommerce payment value – down from 50% in 2022.
As Boku says in its white paper, “It’s all playing out exactly as Menger predicted more than 150 years ago”.
With the turning of the tide, Boku believes that digital merchants should embrace and enable the change.
By supporting local payment methods, it argues, they will have new opportunities “for innovation, differentiation, and operational efficiency.”
Download a free copy the new white paper now for more on how the rise of local payment methods are going to impact the way we do business in the future.
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