‘Buy Now, Pay Later’ Options Drive Digital Wallet Adoption
7-9-2020
As shoppers embrace new technologies and engage in social commerce, and Gen Zers become a larger percentage of the consumer base, digital and mobile wallets are transforming online consumer behaviors. Americans are increasingly paying via mobile wallet and will be choosing this payment form for 10 percent of retail transactions by 2023, according to the “Worldpay From FIS 2020 Global Payments Report.”
Globally, 22 percent of in-store purchases were conducted using mobile/digital wallets in 2019, up from 16 percent the previous year, according to FIS. The analysts predict that digital wallets will represent 52 percent of global e-commerce sales in three years.
In the United States, 40 percent of Americans used credit cards for in-store purchases in 2019, and that number is expected to rise to 42 percent by 2023. But digital and mobile wallets are growing in popularity. Although U.S. consumers continue to prefer credit cards for online shopping, digital and mobile wallets are expected to surpass credit cards as the most preferred online payment method by 2021, according to FIS.
FIS identified Buy Now, Pay Later (BNPL) methods as the fastest growing online payment preference. BNPL offerings such as Afterpay and Klarna enable consumers to delay payment or pay by installments over a set period. These options are currently popular in Europe, the Middle East, and Africa. In North America, BNPL e-commerce purchases are expected to grow from less than 1 percent in 2019 to 3 percent by 2023.
“Merchants are first and foremost looking for solutions that convert browsers into shoppers. In order to do that, they need to offer the most premium checkout experience out there, which is where mobile technology is thriving,” said Casey Bullock, general manager for global e-commerce, North America, Worldpay Merchant Solutions, FIS. “Digital wallets and BNPL represent the art of the possible in a mobile-first consumer market, giving new tools to merchants who must open new doors to shoppers looking for more flexible and personalized ways to pay.”
About ETA
The Electronic Transactions Association (ETA) is the world’s leading advocacy and trade association for the payments industry. Our members span the breadth of significant payments and fintech companies, from the largest incumbent players to the emerging disruptors in the U.S. and in more than a dozen countries around the world. ETA members make commerce possible by processing approximately $56.75 trillion annually in purchases and P2P payments worldwide and deploying payments innovation to merchants and consumers.
ETAs membership spans the breadth of the payments industry to include independent sales organizations (ISOs), payments networks, financial institutions, transaction processors, mobile payments products and services, payments technologies, and software providers (ISV) and hardware suppliers. For more information, visit electran.org.
