The Rise of Digital And Contactless Payments Around The World
It’s estimated that by 2020 almost 1 in every 2 dollars spent online will come from purchases made using mobile devices (TMG).
Gartner Group estimates 6.4 billion connected things were in use worldwide during 2016. That’s an increase of 30 percent from just one year prior. The firm expects that number to more than triple, growing to nearly 21 billion devices by 2020.
The rise in purchases from mobile and other connected devices has led to a surge in digital payment options. Despite a wide variety of choices on how to pay, consumers are increasingly choosing prepaid for e-commerce payments. In 2015, prepaid debit cards accounted for $23.8 billion of the total $341 billion in online sales in the United States. By 2018, that figure is estimated to increase to $29 billion.
“In many ways, a prepaid card is to a mobile wallet what a debit card is to a checking account,” prepaid industry executive Amir Wain says. “Think about how much more accessible debit cards made our checking accounts. Prepaid cards do the same for mobile wallets today.”
Around the world, we see similar results occurring:
Payments Canada and Leger Marketing has issued the Payments Pulse survey revealing that 66% of respondents are willing to let go of cheques and traditional payment methods and are looking at alternative payment options like mobile wallets.
Kapronasia and CANCAN have released a new survey on the spending habits of Chinese nationals when traveling abroad. 67% of respondents report that they use mobile payments for overseas purchases.
Merchants too are responding to these changes, as 80% of respondents cited consumer demand as one of the main reasons for adopting mobile payments.
The eMarketer’s latest UK study shows that 60% of the country’s digital buyers ages 14 and older, accounting for 25.17 million people, will make online purchases via smartphone in 2017. Furthermore, smartphone commerce will increase by 45.7% from 2016, outpacing the anticipated 14.5% increase in overall retail ecommerce.
Data released by in the Contactless Spending Index (Barclay) shows that contactless spending has grown 34% since the start of 2017.
A report commissioned by the Bank of America has stated that mobile payments is a growing trend among baby boomers. The survey uncovered the fact that 49% of baby boomer respondents, who are not currently making person-to-person (P2P) payments using mobile technology offerings, plan to do so before the end of 2017.
TMG experts have predicted that prepaid cards use will become increasingly popular. They expect acceptance to increase as digital payments become more commonplace and demand for prepaid options continues to rise.
80 percent of merchants now see mobile payments as a fundamental part of their business strategy, with 92 percent expecting to maintain or increase investment over the next 12 to 18 months. (Rambus)