Global Payment Report 2024: The Era of Consumer Choice
Wait for CBDC and Stablecoins. "You ain't seen nothin' yet!"
We are entering “the era of people and payments,” where consumers have more choices than ever but this is just the beginning!
According to WorldPay, this era is not defined by technology but by people. Consumer choice is driving merchants more than technology.
I agree, but I think that we haven’t seen anything yet. The consumer choices that we have now, particularly in the West, are all based on credit cards and limited.
Like Rome's fall, credit cards will fall, even though their transaction values are at an all-time high for now.
Stablecoins and CBDCs will take a bite out of their market share because personalization is all about choice!
We will soon have even more consumer choices. Technology will be behind these choices, making for big changes most can’t imagine!
👉TAKEAWAYS
Digital wallets are the people’s payment choice
In 2023, wallets accounted for 50% of global e-com spend (> $3.1T) and 30% of global POS spend (> $10.8T). By 2027 wallets are projected to account for more than $25 trillion in global transaction value (49%) across e-commerce and POS.
Cards show strength inside and outside digital wallets
Consumer attraction to digital wallets isn’t a turn away from cards. In card dominated markets, card spend is simply shifting to digital wallets like Apple Pay, Google Pay and PayPal. (See growth of QR on pg 16)
A2A remains challenged in card-heavy markets
Account-to-account (A2A) payments are becoming dominant from Brazil to India. A2A payments have found less success to date in card-saturated markets such as the UK and USA. Merchants crave A2A’s lower cost of payment acceptance. Can consumers be enticed to break their card habits? (See page 21)
Consumer demand for BNPL is steady against headwinds
Buy Now Pay Later companies faced well- documented headwinds in 2023 including rising interest rates, looming regulation and souring investor sentiment.
Global e-com growth outpaces POS by > 2-1
Global e-commerce surpassed $6.1 trillion in 2023 and is growing at more than twice the rate of global POS value.
Cash remains relevant amid economic uncertainty
Globally, cash fell -8% in 2023, and is expected to decline at -6% CAGR through 2027. Yet cash remains a vital payments tool for billions of consumers. Cash has a double-digit share in thirty of forty markets in this report.
👊STRAIGHT TALK👊
So how long will the reign of the king of payment “cards” last?
With all this talk of consumer choice, most in the West have frightfully few payment choices because all run on card rails. There is no escaping them.
Consider that in Brazil, India, and China; consumers will soon pick between cards, native A2A, stablecoins, and CBDC!
With four means of payment, consumers will have real choices, and the competition that all should welcome will start in earnest.
The ability to personalize payment to your lifestyle by picking the one that suits your needs is a significant development and should be welcomed by all.
But remember, this is just the beginning.
We haven’t seen anything yet!
Thoughts?
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