Most Popular Payment Methods in 2017
We are witnessing unprecedented growth for non-cash payments around the world. Cash and cheque are declining, whilst multiple non-cash methods are surging, according to the most recent data available.
Global electronic non-cash payments grew 11.2% to 433 billion transactions, breaking a decade-long record for growth in 2014-15 (the most recent year with accurate data), according to the Capgemini and BNP Paribas World Payments Report 2017.
Non-cash payments include everything from bank transfers to credit and debit cards and other electronic transactions, including PayPal, Apple Pay, TransferWise and dozens of other payment methods. At present, mature markets account for 70% of payment volumes; but fast-growing emerging markets are now responsible for 30% of electronic transactions.
China is now the third largest payments market, after the US and Europe. The fastest growing regions are ‘Emerging Asia’, which went through 21.6% growth in 2014-15, compared to 6.8% in mature markets. Central and Eastern Europe, the Middle East and Africa (CEMEA) experienced 16.4% growth in the same period.
Popular & Emerging Payment Methods
For online shoppers, the preferred method of payment is still a credit card – with 42% of people making payments using credit cards. Visa and MasterCard are the two most popular card scheme brands. Electronic payment methods, such as PayPal, is the second most popular option, with 39% using one of those methods, and debit cards third (28%).
Numerous electronic payment systems are transforming how customers pay for goods and services online and transfer money between themselves. Around 2.2 billion people still don’t use formal bank accounts, mainly in emerging Asian markets, Africa and Latin America. Financial institutions, fintech startups, charities and card schemes – including Visa – are creating services to meet the needs of the ‘unbanked’, which in turn is encouraging innovation in mature markets.
Visa Europe moved into the e and mcommerce market with a digital solution, known as V.me, a digital wallet. However, they closed this and relaunched as Visa Checkout in 2016, now with 20 million users and a partnership with PayPal, which itself has over 200 million users, driving forward new growth and more options for consumers, plus easier integration and checkout services for merchants.
Relatively new payment methods, which can be used for contactless, in-store transactions and online purchases, including Apple, Samsung, Android Pay and Google Wallet are responsible for 41% of contactless payments. Online and in-store, more small and medium businesses are experiencing demand for eWallet and contactless payment options so that customers already using these services can make payments from the same device, platform or eWallet.
Peer-to-peer (P2P) transfers are also changing; with new fintech challengers disrupting online and legacy bank transfer platforms. It is becoming easier and cheaper to make an international transfer. In the first half of 2017, an extra $200 million in P2P transfers have been processed by vendors.
Key Takeaways for Merchants:
- Cash in no longer king.
- At minimum, customers need contactless eWallet-based options in-store, alongside the most popular card schemes (for your country/region).
- Ecommerce checkouts also need alternate payment methods, plus the mainstream options, which includes PayPal, Visa and MasterCard.
- Loyalty schemes need to be electronic. Customers who shop often enough will download an app and will keep using it, compared to card schemes that get forgotten and don’t generate an ROI.
- Security and user experience are essential for customers. Encouraging online shoppers to convert means ensuring the user-experience is simple and straightforward, whilst keeping them secure from hackers and cyber criminals.
To find out more about how you can reach Chinese consumers with alternative payment methods, read this post – Alipay – How To Reach 450+ Million More Customers