It’s no secret that the payments landscape has seen great transformation over the last 20 months and with digital technologies soaring in popularity so to meet shifting consumer demand. The migration to eCommerce in the wake of brick-and-mortar shop closures because of the pandemic has diminished the use of cash and led to the rise of digital payments in the form of contactless, mobile and eWallets.
Our latest report, Global payments outlook 2022, delves into the eCommerce ecosystem across key markets, including Europe, Asia Pacific (APAC), the Middle East and North Africa (MENA), North America and Latin America (LATAM). This also involves examining regional payment preferences for today and for the future while spotlighting ways that merchants can conquer new brands and markets.
The “calm” after the Covid-19 storm across regions
In the face of Covid-19, the road of economic recovery has been bumpy in every corner of the world. Predictions for 2022 indicate slow yet promising signs of improvement for businesses seeking to regain operational resilience and engage new customers.
APAC is a multifaceted region with diverse national economies and remains the world’s fastest developing region, mainly spurred by China and India. When it comes to recovery after the pandemic, China and Vietnam marked a forecasted growth of 8.1% and 6.6%, respectively, with the rest of the region following suit with 4.4%.
Simultaneously, the US constitutes one fourth of global economic activity, yet the pace that the local economy will be progressing in 2022 (3.5%) reflects a modest rebound when compared to Europe’s estimated growth by 4.4% around that time. MENA is also recovering from Covid-19 given that the regional Gross Domestic Product (GDP) is expected to rise by an average of 4.2% this year with LATAM's GDP attuning to it with 3%.
Lockdowns unfolding as a result of new coronavirus strains have encouraged consumers across the globe to reconsider their spending habits. Yet, one thing is certain: cash usage is waning in most of the regions that take centre stage in our report. Overall, it seems that each region is steadily crawling back to normality and almost steering towards a more digital-driven payment landscape after Covid-19. This suggests that the ground is fertile for eCommerce merchants aiming to break into new territories after meticulously evaluating each market's complexities and consumer needs to craft their go-to market strategy.
eCommerce for the win in a post-Covid world
Although the pandemic has taken a toll on the global market, the eCommerce sector keeps flourishing and forging expansion opportunities for online businesses. In this report, we observe how Asia’s eCommerce market is thriving, as it accounts for more than half (51%) of total retail sales. This seeps into the US as the second largest market for eCommerce after APAC, recording a whopping US$538 billion worth of revenue in 2020.
In a hyper-digitalised age, it’s a no brainer that businesses will need to keep an eye on internet penetration rates in their target markets so to level up their processes and adjust their offering accordingly. The African sub-region of the Middle East is one of those markets. In fact, Southern African countries mark the highest rate of internet users, with first being Kenya (85%) then Libya (84%), Nigeria (73%), Mauritius (72%) and Seychelles (72%) as of January 2021.
Smartphones and mobile devices are another key factor to consider when accessing new territories like LATAM, given that an astounding 75% of Latin American consumers will make their online purchases using their smartphone by 2024. Quite inevitably then, mCommerce (or else, mobile commerce) stands as a crucial marker for Latin American eCommerce, as it’s expected to hit US$96.68 billion in sales by the same year.
Looking ahead, the eCommerce landscape worldwide is more than positive. Particularly, with a projected total of 564.4 million eCommerce users by 2025 in a continent as diverse as Europe and 382.1 million users in the US by the same year, these regions are dynamic markets for any merchant looking to enter them so long as they know their popular payment methods.
Without further ado, let's take a closer look at payment preferences on a global scale.
Payment preferences differ across key markets
Steep divergences in ways of paying are a staple amongst consumers all over the world, yet card transactions play a starring role in the eCommerce ecosystem. Precisely, the payment method of choice in Europe was credit and debit cards (36.8%) in 2021, closely followed by alternative payment methods (34%), bank transfers (22%) and cash/cheque (7.1%).
Cards remain a regional favourite in payments across MENA countries too, while in both regions Visa is the card scheme that leads the game in card-based transactions, recording 58% and 37% consumer reach across the two regions, respectively.
The payments landscape differs considerably in the African sub-region of the Middle East. Unlike more than a quarter (35%) of Nigerian consumers going for bank transfers, cash and/or cheques was the driving payment option for eCommerce sales amongst shoppers in Kenya, Morocco, and Egypt in 2021. Intricacies in payment preferences are also noticeable in APAC, as the region’s payment market was governed by alternative payment methods (APMs) and digital wallets (78.6%) in 2021. North America is complicit in the traction that APMs are gaining seeing that 81% of buyers used Buy Now, Pay Later (BNPL) for their eCommerce and in-store shopping in 2021. LATAM has also witnessed further spikes in eWallet usage, with Mercado Pago being the dominant mobile wallet in the region and trusted by almost 80% of Argentinian consumers in 2021.
Evidently, the payment preferences present stark contrasts from region to region. However, a dedicated payment service provider with a deep understanding of local markets and local capabilities should be well positioned to help you ensure increased payment acceptance and coverage that can boost your conversions and revenue.
Take your business beyond borders with emerchantpay
Extending the scope of your business within an ever-growing eCommerce landscape, irrespective of cross-border barriers, doesn’t seem like a far-fetched ambition for merchants anymore. At emerchantpay, we offer you the tools and insights to ensure transparency and efficiency for your payment performance. As a leading global payment service provider for online, in-app and in-store payments, we enable businesses of any size to design a seamless and engaging payments journey for their customers anywhere in the world.
Download your copy of Global payments outlook 2022 now and learn about how key markets across the board are recovering from the Covid-19 pandemic as well as the shifting consumer expectations around eCommerce and payment methods.
Get in touch to discuss how you can make more informed business decisions to accelerate your business growth for maximum profitability.