PPRO, a provider of local payments infrastructure has released the 2021 edition of its Payment Almanac. The global eCommerce market is expected to grow to $6.9 trillion by 2025. Consumers expect to make purchases with their preferred payment method.
Yet many firms still lack the knowledge, licensing, and technology to conduct local transactions. Throughout the pandemic, many merchants, especially those based in the US, expanded their eCommerce presence worldwide. To help overcome this challenge, PPRO’s 2021 Payment Almanac provides comprehensive research on local payment methods. In addition to consumer behaviour, eCommerce data, trends and projected market growth for 150+ countries around the world.
For payment service providers and other businesses with payment platforms, the ability to enable alternative and local payments is complex. It requires knowledge about local payments cultures, regulations and local payment methods specific to each market.
Some of the key findings per region from the Almanac include:
- Overall use of digital payments in Europe is forecast to grow by 70% between 2020 and 2025.
- Western and Central Europeans pay for 45% of online purchases using a credit or debit card. The next most popular payment method is bank transfer, which consumers use in 25% of online purchases. Followed by e-wallets, standing at 23% of online transactions.
- In 2020, eCommerce shipment volumes in Europe increased by 149% for internal purchases. It rose 123% for cross-border purchases coming into the continent.
- The eCommerce market in the UK is worth $282.8 bn (£204.8 bn). The figure is expected to grow to $355.0 bn (£257.1 bn) by 2025.
- 32% of consumers in the UK rely on various wallets for payments. With the UK’s dominance as an eCommerce market, it’s likely that mobile and wallet payment methods will continue to grow.
- 24% of transactions in Eastern Europe are cash-based. While Western Europe is heavily dependent on bank transfer payments.
- US-based merchants remain a top seller worldwide. They make up almost 50% of cross-border eCommerce purchases in Canada, Mexico, South Korea and Brazil.
- In Canada, where 49% of cross-border shopping activity comes from the US, 23% of transactions are from digital wallets. For US-based merchants, that means offering Canadian consumers the option to use local methods like paysafecard, paysafe:cash and Hyperwallet.
- Popular local payment methods like PayPal’s Buy-in-4, AfterPay, Venmo and more are continuing to increase in popularity. This is driving by the Buy Now Pay Later trend within eCommerce transactions.
Asia Pacific (APAC)
- 60% of consumers in the APAC region conduct payments with digital wallets, higher than any other region.
- 72% of payment transactions in China are done with wallets like Alipay and WeChat Pay. Additionally, 17% of cross-border transactions originating from the US, this is a growing region for US-based merchants.
- 42% of Australian eCommerce activity is cross-border. Australia and New Zealand continue to grow into a major eCommerce hub for the globe.
Latin America (LATAM)
- 14% of transactions in LATAM are bank transfers and 60% are card-based. This signals the popularity of local bank cards and payment methods such as Boleto Bancário, PIX and Oxxo.
- Similar to other countries in LATAM, eCommerce growth in Argentina was up 76% in 2019 alone and growing. 71% of eCommerce traffic being conducted cross-border.
- The unbanked population in areas like Brazil is reducing as an effect of government actions taken during the COVID-19 pandemic. There is an increased reliance on emerging payment methods like e-wallets, connected to a growing reliance on eCommerce.
“The reality of today’s eCommerce landscape is that brands are no longer siloed to one country or region. Instead, they have the opportunity to conduct business across multiple borders,” said Claire Gates, Chief Commercial Officer. “The proliferation of local payment methods has intensified the challenge for companies who seek to make transactions simple and secure.”
Enterprise Times: What this means for business
Enterprises engaged in international eCommerce business will find this report useful. For instance 77% of global online purchases are not made with an international credit card. But with a local payment method. The Almanac provides brands, online retailers and retailers the eCommerce with a useful resource to understand the payments landscape. It showcases how the complexity of payments is increasing. Brands need to understand these regional differences if they want to capture new customers. There is relevant advice about the future trends and meeting the needs of their target markets. For companies looking to sell into a new market, the Payment Almanac may help refine their cross-border strategy. By providing an analysis of market trends and payment methods in every region.