Boku, a global network for localized payment solutions, has collaborated with Juniper Research to release the '2024 Global Ecommerce Report: The Changing World of Payments'. The report offers an examination of consumer payment preferences and behaviors across the globe, highlighting a notable trend towards local payment methods in ecommerce transactions.
Local Payment Methods Outpace Traditional Cards
Based on a survey of 10,500 consumers and data analysis from 37 major markets, the report has indicated a decline in the market share of traditional card payments alongside an increase in the use of local payment methods for online purchases globally. Key findings include the rapid growth of Account to Account (A2A) payments, such as PIX in Brazil, UPI in India, and iDEAL in the Netherlands, emerging as the fastest-growing payment method within ecommerce.
According to the report's global findings, traditional card payments are expected to decrease to 19% of transaction value by 2028, down from 31% in 2023. Conversely, local payment methods are projected to constitute 58% of ecommerce transaction values by 2028, an increase from 47% in 2023, marking the first time they surpass traditional card payments in transaction value. Additionally, it is estimated that 37% of individuals globally will actively utilize local payment methods by 2028.
Instant A2A Payments and Wallets to Dominate by 2028
Instant A2A and non-card-linked wallets are forecasted to account for over 50% of ecommerce transaction value globally by 2028, with instant A2A payments anticipated to more than double, constituting 18% of all ecommerce transactions by volume by 2028, up from 8% in 2023.
Stuart Neal, the CEO of Boku said: “Our research shows the way the world transacts online is changing fast, and that change is being driven in the main by a consumer preference for convenient, seamless payment methods like digital wallets, direct carrier billing and Account to Account transfers. Merchants now realise that the key to their future global growth and success lies in their ability to offer consumers more payment choice.”
“At Boku, we’re excited to provide the world’s largest merchants with access to our global network of localised payment solutions so their customers can more easily pay for the things they love, the way they want - no matter where they are in the world.”
The report emphasizes the significance of payment choice for consumers worldwide, particularly among mobile-first generations, who prioritize the convenience and seamlessness of digital wallets, direct carrier billing, and instant A2A payments. This shift in consumer behavior is shaping the present and potentially paving the way for adoption by older demographics.
From Mobile Money to A2A Payments, Insights from Africa to Asia
Regionally, the report provides insights into specific markets. In Africa & Middle East, local payments and mobile money services like M-PESA and MoMo have seen success, necessitating highly localized payment strategies. Similarly, in Asia Pacific, while card payments remain significant, local payment methods are rapidly gaining traction.
Europe anticipates a decline in card payments with substantial growth in A2A payments, while the Far East & China continue to prefer mobile wallets. LATAM and North America also exhibit shifting payment preferences, while the Indian Subcontinent sees a significant shift towards local payment methods, particularly A2A payments, driven by successful initiatives like UPI in India.
Nick Maynard, the VP of Fintech Market Research, at Juniper Research said: “Our research for this report from Boku highlights that against a backdrop of continued strong growth in ecommerce, the global card schemes (credit, debit and card-linked wallets) continue to lose share to regional and local payment methods. This is a trend seen at an aggregate global level but also repeated in every region across the world."
