Global payments report preview

Your definitive guide to the world of online payments

November 2015
Introduction

Today it’s more important than ever to ensure your online

payment process matches your consumers’ needs. But with
more than 300 payment schemes operating around the
world, this isn’t always easy.
Our 2015 Global Payments report will help. Providing
granular detail on current payment preferences and trends in
30 countries it’s the perfect way to really make sure you are
connecting with your consumers.
If you are thinking of expanding globally or want to optimise
your payments, this report will give you an insight into which
payment methods you will need.

2
Methodology
We compiled this report mainly using our own data and insights. In addition, we also used other external sources, namely: Euromonitor,
Datamonitor and ystats.com.

The forward-looking statements and figures contained in this report relate to the eCommerce industry as a whole and not Worldpay’s
business. They are indicative predictions based on the data we have used and our own experience and should be treated as such.

Our knowledge is based on years of experience in global eCommerce and this report is complemented by a number of surveys and
interviews with experts in the payments industry.

We have also used more than 100 other secondary data sources, including:

• Local card, banking, and/or payments associations

• Facts and figures on various eWallets and other alternative payments schemes
• Facts and figures on various card schemes and payments providers
• eCommerce industry reports and studies
• Other payments surveys and reports
• Third-party news articles

3
Payment method definitions

• Bank Transfers • PrePay

• Cash on Delivery • Others
• Direct Debits • Pre-Paid Cards
• eInvoices • Debit Cards
In this section you will find an
explanation of each payment • eWallets • Credit Cards
method outlined in this report. • PostPay • Charge Cards

4
Alternative payments
Payment
by type method definitions
Alternative Payments methods are all those payments that are not cards running
on global scheme networks such as Visa, MasterCard or American Express.

Real-Time Bank Transfers Cash on Delivery Direct Debits eInvoices

Consumers pay for goods using A transaction in which a Direct Debits aren’t When using eInvoices,
their online banking facility. They payment for goods is made relevant to all merchants. consumers can pay for
are either redirected to their at the time of delivery. This They’re limited mainly to goods after delivery,
bank or select their bank from a method is set to increase in low-value or recurring without sharing credit card
provider’s page. Authorisation is India and certain countries transactions. They are or bank details.
immediate in most cases.
in South East Asia. popular for regular, It can be as simple as
Examples: iDeal, Sofort Banking, Although popular in some predictable payments, such entering their email
eNets, Przelewy24, Safetypay regions, Cash on Delivery as subscriptions, although address and postcode to
is specific to particular they carry the risk of make a payment.
Offline Bank Transfers countries and suppliers, it chargebacks.
Consumers are given a reference isn’t a scheme that can be Examples: Klarna, AfterPay
Examples: SEPA DD, ELV
number during the purchase rolled out globally.
process. They can log in to their
online banking facility, at their Examples: Merchant
leisure and use the reference and bespoke delivery
to complete the transaction. company services
Authorisation is not immediate.

Examples: Dineromail, SafetyPay

Total turnover value in US$/ Total turnover value in US$/ Total turnover value in US$/ Total turnover value in US$/
Percentage of total eCommerce market Percentage of total eCommerce Percentage of total eCommerce Percentage of total eCommerce

2014 2014 2014 2014

$212 bn/11.2% $124 bn/6.6% $6 bn/0.3% $3 bn/0.2%
2019 forecast 2019 forecast 2019 forecast 2019 forecast
$292 bn/12.0% $167 bn/6.9% $18 bn/0.7% $10 bn/0.4%
5
Alternative payments by type
Payment method definitions

eWallets PostPay PrePay Others

Easy and secure to use, this When a consumer selects a Consumers need to buy These include mobile
is quickly growing payment product online, they pay for a card or voucher before carrier billing, crypto-
method becoming it later at an affiliated outlet starting a transaction. currencies and other
increasingly popular across or store. The delay between These cards are not emerging technologies.
all sectors. Consumers can the initial order and the usually run on scheme
networks (such as Visa Examples: Bitcoin,
either use stored value or consumer completing Zong, BOKU
and MasterCard) and
take funds from a payment their payment means that
are usually authorised
type linked to their eWallet, this does not always suit
immediately. Most prepay
giving them choice and perishable goods and time-
products have a funding
convenience. sensitive purchases. limit and some don’t allow
Examples: AliPay, Tenpay, Examples: Konbini, Boleto multiple cards/vouchers to
PayPal, Qiwi, Bancario fund one single transaction.
Yandex.Money Examples: PaySafeCard

Total turnover value in US$/ Total turnover value in US$/ Total turnover value in US$/ Total turnover value in US$/
Percentage of total eCommerce Percentage of total eCommerce Percentage of total eCommerce Percentage of total eCommerce

2014 2014 2014 2014

$387 bn/20.5% $6 bn/0.3% $55 bn/2.9% $20 bn/1.1%
2019 forecast 2019 forecast 2019 forecast 2019 forecast
$647 bn/26.7% $19 bn/0.8% $175 bn/7.2% $19 bn/0.8%

6
Payment method definitions

Pre-Paid Cards Debit Cards Credit Cards Charge Cards

These are cards that run Bank cards used in cash Credit cardholders (who Similar to credit cards,
on scheme networks such transactions, which are not may pay annual service the main difference being
as Visa and MasterCard. credit cards. In a debit card charges) draw on a credit that the full balance – of
These cards can be used transaction, the amount of limit approved by the all purchases made in a
to make purchases or a purchase is withdrawn card-issuer such as a bank, period – has to be settled
withdraw cash in the same from the available balance store, or service provider in full in the following 30
way as a debit or credit in the cardholder’s account. (an airline, for example). day period, rather than the
card. The key difference is If the available funds are Credit card balances are balance rolling with part
that they need to be loaded insufficient, the transaction usually rolling, whereby part payment being made.
up with cash in advance – is not completed (except of the balance needs to be Examples: Most American
the balance then operates where an overdraft facility paid (with interest Express cards
as the spending limit. is in place). and/or charges) on a 30-day
Often offered to the Also called asset card (in basis, until the full balance
un/under-banked, younger the US), or payment card is paid.
people, or people with a (in the UK).
poor credit history.

Total turnover value in US$/ Total turnover value in US$/ Total turnover value in US$/ Total turnover value in US$/
Percentage of total eCommerce Percentage of total eCommerce Percentage of total eCommerce Percentage of total eCommerce

2014 2014 2014 2014

$45 bn/2.4% $396 bn/20.9% $573 bn/30.3% $59 bn/3.1%
2019 forecast 2019 forecast 2019 forecast 2019 forecast
$39 bn/1.6% $413 bn/17.0% $577 bn/23.8% $41 bn/1.7%

7
Top trends

8
Is the global eCommerce market growing?
up

in
US $1.6 6 t n
on 2014

the global eCommerce market

is expected to be worth

US $2.4 tn with
is

ce
er it
by
of this being
m m h exclusively
Co t o
a l e te d from mobile
b
Glo xpec devices
e
9
How will the landscape of Alternative Payments evolve over time?

They are set to claim

In In our previous report we predicted that alternative

payment m
payment methods would account for 59% all eCommerce

ive turnover by 2017. Although alternative payments are

undoubtedly on the rise, they have not grown as fast
of
at

eth

as originally predicted. This is mainly due to delayed

altern

launches of key card scheme’s eWallet initiatives which

ods

eCommerce turnover by
global were expected in 2013. Another important factor is that
eCommerce UnionPay has moved more slowly than anticipated in the
turnover
ts
ove

Chinese eCommerce market, which is still dominated

to
en

by AliPay.
ok m
r

ca r d p a y

up to

of eCommerce turnover

of eCommerce turnover

is expected to have the largest shift towards alternative payment methods

2014 2019
10
Which payment method will become the most popular in the future?

$647

$577
$573

$412
$396
$387

$292

$212

$167 $175

$124

$59 $55
$41 $45
$20 $19 $19 $39
$18
$6 $3 $10 $6

Bank Cash on Charge Card Credit Card Debit Card Direct eInvoices eWallet Other PostPay Prepaid PrePay
Transfer Delivery Debit Card

(US$ billions) 2014 2019

11
In the future, what will be the split between Card and Alternative
Payment Methods (APM) by region?

APM Card

2014 49% 51%

APM Card
2019 55% 45%
2014 28% 72%

2019 35% 65% EMEA

North America

APM Card

2014 58% 42%

2019 63% 37%

Asia Pacific
APM Card

2014 25% 75%

2019 29% 71%

Latin America
Based on percentage of eCommerce turnover
12
Global payment methods breakdown 2014 2019

Credit Card 30.3% 23.8%

Debit Card 20.9% 17.0%

30% eWallet 20.5% 26.7%

Bank Transfer 11.2% 12.0%

Cash on Delivery 6.6% 6.9%

2014
Charge Card 3.1% 1.7%

PrePay 2.9% 7.2%

Pre-Paid Card 2.4% 1.6%

25% eInvoices 0.2% 0.4%

PostPay 0.3% 0.8%

Direct Debit 0.3% 0.7%

2019
Other 1.1% 0.8%

13
Payment trends 2014 - 2019, North America

2014 2019

Credit Card 40% 37%

Debit Card 25% 22%

eWallet 14% 21%

Bank Transfer 7% 8%

Cash on Delivery 4% 3%

Pre-Paid Card 4% 4%

PrePay 2% 2%

Charge Card 2% 1%

Direct Debit 1% 1%

Other 1% 1%
14
Payment trends 2014 - 2019, Latin America

2014 2019

Credit Card 39% 34%

Debit Card 26% 28%

Bank Transfer 9% 10%

Cash on Delivery 7% 8%

Pre-Paid Card 7% 6%

eWallet 5% 4%

PrePay 3% 6%

Charge Card 3% 3%

Other 1% 1%

15
Payment trends 2014 - 2019, EMEA

2014 2019

Debit Card 29% 26%

eWallet 20% 21%

Bank Transfer 17% 18%

Credit Card 13% 12%

Charge Card 7% 5%

Cash on Delivery 6% 7%

PrePay 3% 5%

Direct Debit 1% 1%

eInvoices 1% 1%

Other 1% 2%

PostPay 1% 1%

Pre-Paid Card 1% 1%
16
Payment trends 2014 - 2019, Asia Pacific

2014 2019

Credit Card 33% 27%

eWallet 30% 33%

Bank Transfer 12% 11%

Cash on Delivery 10% 10%

Debit Card 8% 8%

PrePay 3% 7%

Charge Card 1% 1%

Other 1% 1%

PostPay 1% 1%

Pre-Paid Card 1% 1%

17
Key insights

18
The dragon awakens

China has been a dominating force in the global economy and the rise of the middle
class and the changing consumption habits have driven YOY eCommerce growth.
However, the near-monopoly that has been historically enjoyed by domestic payment
methods is coming to an end, and domestic operators now recognise that their
market share is limited and under attack by start-ups and large international players.

The result is that domestic operators are now starting to expand into neighbouring
countries and beyond. UnionPay, for example, has been making significant efforts
to improve international acceptance by – among other things – providing exclusive
privileges in the US and forming partnerships in Germany to ensure ATM coverage.
The marketing and product strength of these companies means they can make an
impact on new markets in a very short timeframe.

19
The real winners we’re likely to see in the coming years

Tenpay: as a result of recent innovation, this payment method is poised to increase

its share of Chinese market.

MasterPass: expected to win significant share by adopting a new approach of

selective market entry, especially in non PayPal dominated markets and China.

UnionPay: the eCommerce user experience is evolving as the company better

understands the eCommerce space. With a strong position in CPT (cardholder
present transactions) in China, UnionPay is expected to succeed.

PrePay: the markets where Pre-Paid vouchers have been prevalent are flourishing,
though in economies which are historically more credit-driven, consumers are now
choosing to take more control over their finances. This is driving a preference for
Pre-Paid payment options in historically credit-centric markets. Overall, in these
markets the golden age of credit is over – a fact which is precipitating growth in
Debit and Pre-Paid payment methods. No longer do consumers want to burden
themselves with debt – they are hyperaware of the damaging effect of credit, and
their buying behaviour has changed accordingly.

UnionPay

PrePay

Global payment share 2014 2019

*It is worth noting that other eWallets such as Apple Pay, Samsung Pay and Android Pay are also highly likely to increase
market share in future, but as they have recently emerged, there is currently no data available to fully support this.
20
The Shangri-La of payments - eWallets

Our previous discussion about eWallets, in 2013, really included only V.me, MasterPass, Alipay and PayPal.

At that time, there were very few market entrants, and the main players enjoyed a substantial market share. Our (reasonable)
expectation was that Visa and MasterCard would quickly steal significant share from the incumbents as the only viable alternatives.

But who would have thought the world could change so much, or so quickly?

Not long ago, eWallets were invariably part of a retail giant, such as Alipay (Alibaba) and PayPal (eBay). But no longer. Recently, we
have seen bank and network wallets emerge, with Visa Checkout, MasterPass and ChasePay as the forerunners. And there are
other players, too, who have entered the market - players who are not, traditionally, in the payments field. Driven by a need to create
customer ‘stickiness’ by integrating their technology into their consumers’ everyday lives, multinationals such as Apple with Apple
Pay, Samsung with Samsung Pay and Google with Android Pay are revolutionising the payments scene. Never before has consumer
choice been so broad. Interestingly, this is not a result of a simple revenue-generation strategy by these giants; instead, it is all
about value add – a strategy of enriching their customers’ lives by delivering the consumer shopping experience of the future.

21
Who will win the eWallet wars?

Faced with more choice than ever, consumers are very clear on their needs.

The winners of the eWallet war will need to provide a second to none customer experience,
underpinned by the following pillars:

• Continuity of convenience – no need to enter card security details repeatedly;

• Reach/scale – a payment method that can be used in most places;

• Omni-channel – the ability to use the eWallet across all environments, such as in-store,
online and in-app;

• Assured security – consumers still feel that security is more of a concern in

non-card payments;

• Personalisation and loyalty – loyalty schemes and delivery preferences should be

updated automatically, and in real-time. eWallets will overtake Credit Cards by 2019

22
Cash on Delivery - still delivering
Cash on Delivery

global payment share 2019

Although Cash on Delivery was

predicted to drop to 2% of global In Taiwan, 19% of
eCommerce payments, this is expected eCommerce payments
to remain static at 7% until 2019 are Cash on Delivery

In our report of 2013, we predicted that Cash based mCommerce, the need to deliver goods do well to remember that Cash on Delivery still
on Delivery would fall from 5% to just 2% of all and services must inevitably result in Cash on makes up 7% of all payments. It’s also worth
payments. This prediction, however, did not Delivery becoming a premier payment channel. remembering, though, that there’s a challenge
factor in the impact of the BRIC economies on with trying to operate with cash – most notably
the overall payments landscape. Although these In some markets – specifically China, Russia
that it’s highly market-specific and extremely
economies were maturing, we, along with other and Taiwan – we predicted a significant decline
fragmented, and retailers usually have their own
commentators, failed to appreciate just how in Cash on Delivery. But the unexpected and
Cash on Delivery agent. This makes it a payment
quickly they would come of age. substantial growth in these economies, coupled
form that’s particularly challenging to adopt in
with the cultural link to paying with cash, upset
the context of cross-border transactions, as it is
The eCommerce market in India is expected to this prediction. In Taiwan, particularly, consumers
both costly and subject to fraud. When thinking
quadruple over the next four years. The country is have a marked preference to paying with cash,
about establishing a delivery and fulfilment
also set to become the largest SME market in the and we can’t see that changing in the foreseeable
infrastructure in markets where Cash on Delivery
world, overtaking the United States by 2017. With future.
is popular, it’s important to select an appropriate
such expansion, consumer preferences cannot
As cash is such a globally fragmented payment partner, as it’s likely that you will want them to
change at the same rate.
type, there are no clear ‘winners’ in terms of collect cash payment on your behalf.
In an economy historically using cash, which also countries. However, merchants who may be
experiences a sudden boom in non-smartphone tempted to believe that cash is ‘dead’ would
23
Mobile evolution

Global mobile penetration has increased 39% since 2009,

precipitating perhaps the most significant shift in payments
we’re likely to see in our lifetime. It’s a shift that offers a massive
opportunity for merchants looking to sell their wares via mobile
devices – as the Point of Sale can be almost anywhere.

Generally, when it comes to mobile, people usually think

of markets that are extremely technologically savvy with
high mobile penetration and internet access. In fact, the
multinationals have built their mCommerce strategies around
these types of market, predominantly focused upon an evolution
from desktop to smartphone. The countries that drove this
evolution were South Korea, Singapore, Hong Kong, the US and
the UK – but these markets are now starting to mature and will
not be the major growth engine for mCommerce in future.

24
Which mobile markets will be the ones to watch?

MCommerce appears to have two different facets in the

global landscape. This split tends to be driven through mature
versus emerging markets.

In mature markets, mCommerce is usually an extension to

o bile
m
bal ration d
traditional eCommerce, either via mobile optimised sites or,
l o
et ease
more recently, apps on smartphones.
G n
e
Conversely, in emerging markets such as India, Turkey, p
a s incr
Mexico, Russia and South Africa smartphone penetration h
is poor, therefore feature phones (non-smartphones) are
typically the device of choice, and this dictates an entirely
different user experience. R
AG 09
Multinationals looking to take advantage of these markets will erc
e C
c e 20
need to recognise that the principles of mature mCommerce omm sin
markets do not apply to emerging markets. mC

Instead, to access ‘the ones to watch’, they will need to

,
implement a non-smartphone mCommerce strategy.
u r key d
T n
n d ia, sia a
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Me outh
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25
 It’s clear from the many payment Another example of adaptation is in
methods in use around the world that Malaysia, where we’re seeing high

Adapt or become obsolete

one size doesn’t fit all. The regional growth in eCommerce, as a growing
cultural nuances that affect payment middle class of consumers increasingly
preferences and behaviours around embrace new ways to pay. Although
the world will never, at least in the cards currently dominate in Malaysia,
foreseeable future, be eliminated. with 75% of the market, it’s likely that
this share will fall sharply over the next
But it’s also true that consumers are no four years, largely due to the higher
longer bound by the classic payment availability of more culturally relevant
methods and traditional credit-based payment methods – bank transfers and
options of the past. Take JCB, for eWallets, for example. This, however,
example. A Japanese card scheme and is not necessarily a shift in consumer
a strong national brand, JCB has for culture, but rather the effect
many years enjoyed dominance of the of companies adapting to the buying
domestic in-store market. However, preferences of a new group of more
JCB has limited international merchant affluent and tech-savvy consumers.
coverage – a factor which became
highly significant with the advent of It is vital for payment methods to
eCommerce, which enabled consumers constantly innovate, to reflect the
to purchase from beyond their needs of current and future consumers.
national borders. As younger generations grow up, their
buying power increases accordingly,
While this hasn’t affected JCB’s and once payment preferences have
ageing consumer demographic, there been established, they are very difficult
is an emerging category of younger to change.
consumers who want to travel,
and purchase goods and services,
from outside of Japan. This group Malaysia’s eCommerce
increasingly prefer an internationally bank transfer share
recognised card rather than JCB, which
has lower international acceptance
than Visa and MasterCard. The result
is a growing disparity between in-store
and online market share. The challenge
faced by JCB is to encourage younger
Japanese consumers’ preferences
towards their own product, something
they are addressing as they invest and
successfully expand their international
merchant coverage.

2014 2019
26
 We hope you’ve found our Global Payments Report useful.
Our payment experts are here to help you navigate through the
world of online payments.
This is a shorter version of our Global Payments Report.
To download the full report please CLICK HERE.

© Worldpay 2015. All rights reserved.

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