How the world pays, now and in the future: The Global Payments Report Ieuan Owen, SVP Strategy Worldpay ecom
What are our key findings?
Improving what we call insight QBRs Case studies worldpay.com/global/insights Blogs / Whitepapers Uplift calculators Interactive infographics
What is the Global Payments Report? Most comprehensive payments report, past editions were our most popular downloads Global landscape: insights and trends Market profiles for top 30 ecommerce markets o o o o Key facts Transaction mix: Cards vs. Alternative Alternative payments Card schemes breakdown
First, let s agree some definitions Credit Debit CARDS APMs Bank Charge Pre-Paid ewallet einvoice Transfer PrePay PostPay Cash on Delivery Direct Debit Other
ecommerce continues to be the place to be % On 2014 the Global ecommerce market is expected to be worth US $1.9tn Global ecommerce is expected to hit US $2.4tn
Mobile commerce growth continuing to outstrip desktop Global mobile penetration up 2014 2019 CAGR Since 2009 (Figures in USD bn)
Healthy growth even in mature markets United States of America 2015 total sales ($bn) 2019 total sales ($bn) CAGR United Kingdom Japan Germany France
and emerging markets continue to soar (at least online!) 2015 total sales ($bn) 2019 total sales ($bn) CAGR China India Russia Brazil Mexico
2015 was the year when alternative payments overtook global card schemes for share of ecommerce spend
Even in the top 10 markets, APMs made up 51% of ecommerce spend 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% US China UK Japan Germany France Canada Australia Russia Taiwan Card APM APM spend in these markets alone was over $700Bn in 2015
How will the regions pay in future? APM Card 2014 APM Card 49% 51% 2019 55% 45% 2014 28% 72% 2019 35% 65% EMEA North America APM Card 2014 58% 42% 2019 63% 37% APM Card 2014 25% 75% 2019 29% 71% Asia Pacific Latin America
Cash on delivery is still relevant, and will remain so In our report of 2013, we predicted that Cash on Delivery would fall from 5% to just 2% of all global payments However In Taiwan, 19% of ecommerce payments are cash on delivery
The big winners are ewallets ewallets will overtake credit cards for share of global ecommerce spend by 2019
ewallets capture the consumer Consumer Merchant ewallet sends approval to merchant 8 1 Consumer picks ewallet Cardholder pays Issuer ewallet Bank / Stored value 5 Cardholders bank: Approve, Refer, Decline, Decline and Pick up Schemes 6 Acquirer sends approval to ewallet 7 The schemes send the decision back to Acquirer 2 Transaction sent to acquirer Issuer 4 The schemes checks card security and sends to cardholders bank for approval 3 Acquirer asks schemes to determine the cardholder s bank Acquirer
We have entered the next iteration of wallets - ecommerce to Mobile New entrants Adaptors Technology heritage Consumer engagement play ecommerce heritage Innovation to remain relevant
How consumers engage with a payment is changing of consumers would like to pay with an ewallet in the future
Who will win? 5 key factors Convenience / UX Reach / Scale Omni-channel Security Personalisation
In Summary: A rising market, with space for most payment methods to grow 2014 2019 1. Credit & Debit cards lose share (~50% to 42%) 2. E-wallets grow share (from ~22% to 27%) 3. Bank / Cash Transfers hold relevance (~19%) 5. Other payment types remain niche 4. Pre-pay APMs grow vs. pre-paid cards
So what does it mean for a merchant?
Do you have the right payment mix today (and will you tomorrow)? Markets Channels Shoppers
We expect divergence in the development of the largest markets Card Schemes + Key APMs Local Payment Methods Important UK U.S. Japan Germany Russia China France Canada Singapore Netherlands Poland India Italy Brazil Hong Kong Belgium S. Korea Spain Australia Denmark Thailand Portugal S. Africa Taiwan Sweden Turkey Malaysia
How much choice is too much? And where should I place my bets? Wallets are everywhere - some will fail Consumers don t want more than 2 payment apps on their phone Accepting everything gets complicated for you and confusing for your shopper
What s the business case for a new payment method? Additional payment methods drive incremental revenue, but at a cost Some are obvious but others are more situation dependent Need to consider uplift vs. cost
Global Payments Report is available at: worldpay.com/global/insights
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