Member Exclusive, Payments

Research: The rise of alternative payment methods around the world

  • Alternative payment methods are growing globally, replacing cash and cards.
  • Tearsheet looks at the numbers by region.
close

Email a Friend

Research: The rise of alternative payment methods around the world

From 2012 to 2017, traditional cash and cards’ market share in digital commerce dropped from 60 percent to 49 percent globally, according to research from McKinsey. In their stead are growing alternative payment methods, like digital wallets, that are becoming the payment method of choice for many consumers.

Payments services are bucking the trend of slowing banking revenue growth. They now account for more than 35 percent of global financial services revenue.

Alternative payment methods in the U.S.

Americans love their cash and cards. They still have a strong affinity for these types of payment methods, choosing to use them 69 percent of the time. However, PayPal is prying consumers away with products like Venmo and PayPal Credit, and startups Klarna and Arm’s deferred e-invoice solutions over strong alternatives to credit cards, with similar APRs.

Alternative payment methods are expected to grow from 31 percent in 2018 to 47 percent by 2022 in the US.

Western Europe

Western European payments methods like iDEAL and Klarna, a buy-now-pay-later solution, have successfully mainstreamed their services. Most banks allow their customers to pay by bank transfer in just a few clicks.

Asia

Use of APMs in Asia is the highest anywhere in the world. In 2018, consumers in Asia preferred to use APM 63 percent of the time, according to McKinsey research. In two years, those numbers are forecasted to go up to 71 percent. The market is dominated by Alipay and WeChat Pay, two giant ecommerce players in the region. These companies, in turn, are investing in new payment players in regions around APAC.

0 comments on “Research: The rise of alternative payment methods around the world”

Payments

With Direct Payouts, Visa can push payments to cards and accounts cross border

  • Visa Direct has built an ecosystem of senders and receivers powered by push payments.
  • Visa is now launching Visa Direct Payouts, extending push payments cross border and to more types of accounts.
Zachary Miller | March 30, 2021
Payments

‘Payment companies are taking a clear political stance’: Politics and payments in the wake of the Trump administration

  • Should payments be politicized? As more than 400 people face criminal charges for the Capitol riots, we explore the repercussions on the payments industry.
  • Experts weigh in on potential polarization and regulations in the long term.
Rimal Farrukh | March 24, 2021
Payments

‘2020 was the year of QR code adoption — 2021 will be the explosion’: QR codes continue to climb in popularity

  • Past the three-month mark of 2021, we’re still seeing QR codes grow in popularity.
  • But how this payment method will expand continues to leave the future of QR codes kind of blurry.
Rivka Abramson | March 18, 2021
Payments

Baseball fans will get a cashless payment experience when they re-enter Petco Park this season

  • Baseball fans will have a cashless experience when they re-enter San Diego Padres' Petco Park next season.
  • The team signed a partnership with Tappit to enable fans to make transactions through the MLB Ballpark app at the stadium.
Rimal Farrukh | March 18, 2021
Payments

Subway standardizes payments across its stores and geographic footprint

  • Subway now offers a standardized payment solution across its European franchisees.
  • Amadis and Worldline are part of nexo standards, a member association which aims to globally standardize payment processes.
Rivka Abramson | March 12, 2021
More Articles