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The sector for online payments is arguably one of the most dynamic markets in the financial industry. The industry has evolved so fast that the projection into its future is purely enthralling. Technology has driven change in the payment space, sweeping past cards, cheques, and cash, into a new era dominated by cryptocurrencies, e-wallets, and one-click online payments. And, because of the COVID situation, we have witnessed a great surge in the popularity of online payments worldwide.
Indeed, cashless payments are becoming an option, impelled by tech innovations from both newcomers and dominant FinTech firms. The digital disruptions in the payment industry have led to the advent of the best payment gateway software, which helps streamline online transactions.
Like most business processes, online payments are constantly changing, and companies must adjust to the latest development to remain competitive. To help you stay abreast of the industry, we have compiled the following online payment statistics and industry insights. Similarly, if you’re a vendor, having these online payment data at your fingertips will help you configure your system better to match customer needs.
Covid-19 and Online Payment Statistics
The year 2020 was a wild one. The outbreak of the pandemic has challenged the resolution of economies and the way the world went about its business. Online payment has been popular during the pre-pandemic era. However, because of social distancing regulations, Digital Commerce and Mobile POS Payment became even more popular around the world.
US consumers deliberately ordered online because of the pandemic
- 31% of US customers have deliberately ordered restaurant delivery/takeout online because of the COVID-19 pandemic. (Statista COVID-19 Barometer, 2020)
- 27% of US customers deliberately ordered hygiene products online because of the pandemic. (Statista COVID-19 Barometer, 2020)
- 26% deliberately ordered clothing online because of the pandemic. The same percentage goes for household cleaning products. (Statista COVID-19 Barometer, 2020)
- 24% ordered food and drink delivery from the supermarket online because of the pandemic. (Statista COVID-19 Barometer, 2020)
- 21% ordered health products online because of the pandemic.(Statista COVID-19 Barometer, 2020)
US Online Payments by Type 2020
- 55% of US consumers used a credit card for online payments in the past year. (Statista Global Survey, 2020)
- 52% of US consumers used a debit card in the last 12 months. (Statista Global Survey, 2020)
- 27% of US consumers used online gateways like Amazon Pay and PayPal. (Statista Global Survey, 2020)
- Only 25% of US consumers used direct debit for their online transactions. (Statista Global Survey, 2020)
Transaction Values of Digital Payments Worldwide in 2020
- $5.2 trillion – the global transaction value of digital payments in 2020. (Statista Market Outlook, 2021)
- 63% of the total digital payment transaction value came from Digital Commerce. (Statista Market Outlook, 2021)
- Mobile POS payments amount to $2 trillion which is around 30% of digital payments value. (Statista Market Outlook, 2021)
- In 2021, the forecasts show that the total transaction value by the end of the year will be $6.68 trillion. $4.195 trillion will come from Digital Commerce and $2.489 trillion will come from Mobile POS Payments. (Statista Market Outlook, 2021)
Online Payment Transaction Value 2020 to 2025
- From 2020 through 2025, transaction value will likely grow 16.3% in Europe, 15.2% in the US, and $11.2 in China. (Statista Market Outlook, 2021)
- In 2020, the UK is the biggest Digital Payments market in Europe with $218.3 billion. (Statista Market Outlook, 2021)
- Most digital customers are in China with 926.1 million. There were 256 million in the US and 480.9 million in Europe. (Statista Market Outlook, 2021)
- The same goes with Mobile POS Systems. China had 555.4 million users in 2020; Europe had 480.9 million, and the US had 256 million. (Statista Market Outlook, 2021)
- By 2025, China is projected to have 1.2 billion Digital Commerce users; the US will have 291.2 million, and Europe will have 569.8 million users. (Statista Market Outlook, 2021)
- By 2025, Mobile POS Payment users in China are projected to be 618.6 million; in the US will be 85.6 million, and Europe will have 174.6 million. (Statista Market Outlook, 2021)
- The US, however, has the highest transaction value among these regions in Digital Commerce in 2020 with an average of $7,012 per user. Europe’s average is at $2,084 per user, while China’s average is at $2,060. (Statista Market Outlook, 2021)
- The same thing goes when it comes to Mobile POS Payments. The average transaction value per user in the US is $2,060 in 2020. China’s is $1,460, while Europe’s is $1,402. (Statista Market Outlook, 2021)
- By 2025, it is predicted that the average value per user in the US will be $11,755 for Digital Commerce. Europe’s will be at $4,736, while China’s average transaction value will be $3,261. (Statista Market Outlook, 2021)
- Also, by 2025, the average transaction value per user in Mobile POS Payments will be $3,261 for the US. Europe’s average will be $1,982, while China will be at $1,815. (Statista Market Outlook, 2021)
It isn’t just the pandemic that’s accelerating this trend. The rise of digital natives, the Gen Zers, has influenced the popularity of digital payments as well.
Source: Statista Digital Market Outlook, 2021
Statistics On The Rise Of Generation Z
The emergence of Generation Z represents a powerful spark of revolution in the online payment space. The oldest members of this cohort are just young adults or teens, and the group was projected to represent 40% of total US consumers by 2020. Labeled as “screen addicts,” or “view now, buy now consumers,” this group has taken over from the much-hyped Millennials, and it’s showing every sign that it is the future customer base for the online payment market.
Natively digital, Gen Z-ers are mobile mavens that crave immediacy and are socially dependent on Facebook, Instagram, Snapchat, Apple, Amazon, and Google. The generation gravitates to digital tools like payment, bill, and expense management applications, and generally, demand a highly-relevant and personalized experience.
- A third of Gen Z-ers want to share their online payments on social media, compared to only 3% of baby boomers. (Accenture)
- 69% of Gen Z-ers use mobile banking apps daily or weekly, while only 17% of baby boomers are interested in using mobile banking apps. (Accenture)
- Online payment statistics intimate that 82% of Generation Z consumers who own a smartphone shop online. (PayPal)
- Also, studies have shown that while 33% of millennials use cash, but only 18% of Gen Z-ers use cash. (Digital Transactions)
- Moreover, 58% of Generation Z have made an impulsive mobile purchase. (Digital Transactions)
- Studies have also found that when it comes to online shopping, 80% of Generation Z are influenced by social media (Retail Dive)
It’s vivid that the financial needs of Gen Z-ers are getting complex by the day, and industry players must up the ante to meet their desires. Businesses must rise to the occasion and elevate online payments by envisioning and actualizing innovations that meet the needs of these trendsetters. For example, the wall that exists between payments and social media needs to be broken down to pave the way for more intriguing online payments. Also, businesses should follow a well-defined guide on implementing payment gateway services to ensure consistency across all channels.
Voice Commerce Statistics
When voice search first entered the commerce industry, it was met with a dizzying onslaught of skepticism. However, voice commerce has come of age, and the use of voice assistants in the industry is rapidly gaining popularity as more and more consumers buy smart devices such as Amazon Alexa, Siri, and Google Assistant to streamline online shopping.
- Only 3.6% of US consumers engaged in voice commerce for retail and grocery products in 2018. (PYMNTS, 2020)
- Voice commerce became more popular in 2019 with a share of 6.2%. In 2020, the figure rose to 6.7%. (PYMNTS, 2020)
- Smart speakers don’t necessarily serve as primary sales channels as eMarketer notes. Smart speakers owners use them for different purposes including play music (97%), weather and news (94%), general questions (90%), reminder (87%), creating shopping lists (71%), make a purchase (62%), enabling smart home devices (57%), and email/calls (55%). (eMarketer)
- A study by Transaction Network Services (TNS) found that 26% of consumers that own smart voice assistant devices have used them to make a payment. (TNS, 2019)
- Also, it’s noted that 34% of consumers in the United States have already purchased food using a voice assistant, while 35% say that given an opportunity, they would use voice assistants to buy food online. (Statista)
- Online payment research has revealed that voice assistant technology is changing the shopping landscape. While the technology is still in its infancy, it’s hard to ignore its growing user base. According to OC&C Strategy Consultants, 36% of US consumers make a purchase via voice assistants. (OC&C)
- Also, OC&CS Strategy Consultants reckons that Amazon dominates the voice shopping space accounting for approximately 90% of total spend. (OC&C)
- Online payment data has shown that in 2022, 31% of consumers in the United States will have used a voice assistant to make payments. (BBVA)
- One alarming statistic is that 74% of consumers state that they are not open to making payments through voice assistants because of security concerns. (TNS, 2019)
The number of consumers who use voice assistants to make payments is relatively small, but the user base is poised for speedy growth. The evolution of AI technology and the efforts being made by innovators to align voice shopping with the needs of modern consumers will make voice payment methods ubiquitous in a few years to come. You better be ready for the voice revolution an arm yourself with one of the best payment gateway solutions for your online and offline store.
P2P Mobile Payment Statistics
If you own a smartphone and have a bank account, then chances are you’ve most likely used or have heard about the peer-to-peer payment service. Mobile peer-to-peer (P2P) payment is one of the most intriguing and fastest-growing technologies in the financial space. This innovative technology is a force to reckon with when it comes to simplicity and convenience.
- Online payment statistics by Accenture intimates that 68% of Gen Z-ers are delighted by instant P2P payments, more than any other demographic groups. (Accenture)
- In the United States alone, the total transaction volume of Mobile peer-to-peer (P2P) payments will surpass $300 billion by 2021. (Nasdaq)
- By 2020, Zelle will have the biggest online payments market share at 56.1 million users, followed closely by Venmo at 38.7 million users. (eMarketer)
- Zelle report that 80% of US consumers have used a P2P payment service, with 50% of new users being people aged 45 years or older. (Zelle, 2019)
- By the end of 2020, 52.5% of US smartphone owners will have made more than one P2P transactions. (eMarketer)
- According to online payment market share data by eMarketer, the number of mobile payment users will reach 150 million by 2020, and the total in-store mobile payment volume will reach $503 billion in the same year. (Business Insider)
- Being an early adopter of P2P payment services, China’s total volume of mobile P2P transactions is predicted to reach a monstrous $6.3 trillion by 2020, dominating a lion share of the global payment gateway market share. (Business Insider)
The incentive to securely and quickly transfer money without having to face the inconvenience of the tedious and complicated procedures has enabled P2P mobile service to cement its spot as the payment gateway of choice for today’s consumers. There is no doubt; P2P mobile payments have made it easy for consumers to send money anytime, anywhere, to whomever they want without worrying about restrictions over transaction amounts.
With P2P payment service, the tide is changing, and social networks are now offering payment services. Facebook, Instagram, and Snapchat are now enabling consumers to close sales within the social media environment, and this is a trend to keep an eye on. Also, going by the statistics, without implementing professional payment gateway tips for online stores, small businesses will miss the opportunity to tap into the power of P2P payments.
Omnichannel Payment Statistics
Decades ago, payment services were location-bound and pretty straightforward, with payments providers solely dictating the terms of accepting payments. Fast forward to today, things have changed, and the need to enable consumers to transact anywhere, anytime with ease, security, and speed has become integral to a business’ success. Technology has changed where and how payments are accepted, and the rise of omnichannel payments has reinvigorated the entire payment space, seamlessly fusing shopping experience across online and offline stores.
- 85% – the global share of customers who shopped online in 2020. (IMI International, 2020)
- Asia (86%) and South America (86%) are the leading regions with the most share of customers that shopped online. Europe has 83% while Australia (79%) and North America (78%) trail the main leaders. (IMI International, 2020)
- Putting some specific payment gateway market statistics to the omnichannel trends, 91% of consumers have plans to shop in-store, while 84% plan to shop online. Besides, 75% of consumers plan to shop both in stores and online. (PwC)
- According to WorldPay, omnichannel shoppers spend up to 300% more than those shopping on a single channel.
- In addition, consumers think of shopping as a single, seamless experience, whether instore, on a mobile device, or online, and so must businesses.
Source: IMI International, 2020
Businesses can get more value by integrating all channels with online, social media, and mobile channels. It’s true that online, mobile, in-app, and in-store sales channels are powerful in their own right. However, many of the best payment solutions today can consolidate these channels to create an impeccable omnichannel pay platform that is at once flexible and secure.
Top 5 Payment Gateway Software
- Stripe is a cloud-based all-in-one payment platform that accepts major credit and debit cards as well as digital wallets.
- PayPal Payments Pro is a payment processing solution that allows merchants to accept credit card payments online and host their own checkout pages.
- 2Checkout offers global availability in over 200 markets, so you can enjoy localized options for selling in the customer’s language and currency.
- Amazon Payments make it faster and more secure for customers to shop at your Amazon store.
- PayU has a direct connection to local acquirers plus an in-house anti-fraud system aside from facilitating online payments.
Customer Experience (UX) Statistics
The changing financial needs of modern consumers and the advent of bold new technologies have put the race to innovate into overdrive. With payment being the most frequent touchpoint between the consumer and the business, customer experience has become the heartbeat and the principal competitive differentiator in payments revolution. For many consumers, payment experience equals customer experience, and they expect the process should be seamless regardless of when and how they choose to make payments.
- 61 % of consumers are for the idea of openly accessing their finances so they can view credit card and bank account balances when making payments via a mobile app. (Accenture)
- Most consumers, including 70% of Gen Z-ers and Millennials, have shown interest in digital payments consultancy and expense management services that enable them to better understand and control their spending. (Accenture)
- 50% of Gen Z-ers and Millennials are willing to share their online bank account details with third-party service providers. (Accenture)
Today’s tech-savvy consumers demand a complete digital experience in their transactions. As a result, forward-thinking businesses must innovate to enhance customer experience and provide the flexibility and convenience demanded by modern consumers. With optimized customer experience, it will be easy for merchants to grow their online payment market size.
Mobile Wallet Statistics
Let’s face it: mobile wallets are giving traditional payment providers, like banks, a run for their money as more and more consumers make their finances mobile. Mobile wallet is a growing trend, especially in the developed markets, where previously underbanked consumers are taking advantage of the estimable consumer-focused payment experience for its perks such as proactive balance alerts, immediate rewards, and streamlined payments and charges.
- In the US, Millennials (46%) lead the share of consumers making digital or mobile wallet payments by age. Gen Z and Gen X follow closely in a tie at second with 46% each. Only 22% of Boomers and 8% of those beyond Boomers use digital or mobile wallets. (Statista, 2020)
- 23% of consumers in the US are willing to give up their digital banking app for a mobile wallet to consolidate all payment information in a single location. (Accenture)
- 75% of consumers in the US use digital wallets because they’re more comfortable than carrying around credit cards.
- Mobile wallets will play a huge role in the growth of the payment gateway market size. As Accenture predicts, in 2020, 64% of consumers will be using a mobile wallet, up from 46% in 2017. (Accenture)
- It’s estimated that over 110 million adults in the US say they’ve swapped credit and cash for a mobile wallet at least once. (Finder)
- At 28%, bank mobile wallets have a lower penetration rate, compared to the merchant’s wallets (39%) and Pays (Android Pay, Apple Pay, and Samsung Pay) at 49%. (Accenture)
- The top reason for using a mobile wallet include convenience (74%), easy to track expenditure (25%), easy to carry (25%), and greater security (23%). (Finder)
- More men (48%) have used a mobile wallet, compared to 41% of women. (Finder)
Interestingly, even with the focus being mainly on the US markets, it’s hard to ignore the revolution of the Chinese mobile wallet markets, which is dominated by Alipay and WeChat Pay. According to Frost & Sullivan forecast, 950 million consumers in China will be using a mobile wallet by 2023. Besides, eMarketer predicts that 79.3% of Chinese smartphone users will be scanning, swiping, and tapping at the point of sale (POS) by 2021. This means that even as global small businesses explore legit payment gateway providers in the USA, they should not play blind to the events taking place in other markets such as China.
AI and Machine Learning Statistics
In the new era of fast-paced technological innovation, Artificial Intelligence (AI) and machine learning outline advanced analytical technologies with an outsized potential to overhaul the entire payment ecosystem for payment processors, banks, consumers, and merchants. AI has the potential to cut fraud, improve customer service, and reduce transaction times. While on the other hand, machine learning has already spread its wings in fraud management.
- Machine learning can help payment providers increase revenue from their existing customer by up to 15% (McKinsey)
- In addition, machine learning can help businesses reduce bad debt provision by up to 40%. (McKinsey)
- According to a payment gateway research by Juniper Research, AI chatbots are predicted to help the financial sector achieve $8 billion in cost savings by 2022. (Juniper)
What Does The Future Hold for Online Payments?
Numbers don’t lie, and it’s clear that the future of online payments is moving towards technological adoption. Currently, the industry has experienced tremendous improvements in terms of security, thanks to the implementation of biometrics, and payment transactions are now fast and frictionless. Payment gateway providers have embraced technological changes to provide an array of benefits craved by today’s consumers.
That said; one trend is conspicuous: online payment innovations are primarily centered around smartphones, AI, and machine learning. As a result, merchants should come up with an overwhelming blend of virtual assistants, IoT, and smartphone apps to remain competitive in the already flooded e-commerce markets. The need to give a customer-centric experience refined by choice, flexibility, speed and convenience should also be a priority for any business that wants to meet the needs of modern consumers satisfactorily.
Above all, it’s good to note that the payment industry is continually changing, and keeping your eyes firmly fixed on the future will be a feather in your cap. For example, businesses should focus on emerging trends such as social payments, tabletop payment systems, and wearable payment devices, like Apple Watch and others, which have recorded a staggering 177% growth rate in recent years.
It won’t hurt, too, to learn more configuration techniques beyond drag-and-drop and plugin tools, the better you can optimize a payment gateway system, many of which have an open API for the taking. For that, you can take a look at this comprehensive guide on how to integrate a payment gateway in PHP, Java, and C#.
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