The payments industry is yet again redefined. Currently, global consumers are adapting their purchasing habits to a challenging macroeconomic climate amid high inflation. Businesses need to reassure their customers that they’re making the right choice by trusting their brand. This also necessitates businesses to optimise their payment strategies for a smoother and safer payment experience.
Our latest whitepaper, Global Payments Outlook 2023, dives into the eCommerce and payment ecosystems of five key parts of the world – Europe, Asia Pacific (APAC), the Middle East and North Africa (MENA), North America and Latin America (LATAM). By spotlighting what's trending in sought-after markets, we aim to facilitate merchants to access new territories, attract new customers, and create new revenue streams.
The state of global economies in 2023
Projections for 2023 lay a more fertile ground for economic recovery around the world following a year of spiking inflation and monetary tightening. This is the time for global businesses to enhance their operational efficiency for increased payments acceptance and conversions.
APAC continues to rapidly evolve, mainly through Southeast Asia and India – both of which are anticipated to register a GDP of 6.2% and 6.1%, respectively, in 2023. After China’s economic slowdown during Covid-19, the country is expected to see a bounce-back of 5.2% this year.
Estimates also show that China's reopening and mature soybean harvest could help protect Brazil from a recession in 2023. When it comes to LATAM, Brazil and Mexico account for the region’s highest GDP with US$1.6 trillion and US$1.3 trillion, respectively, while more and more Asian companies are eyeing these LATAM countries for investment.
Meanwhile, North America has managed to maintain a steadier economic position with its domestic production and export of wheat, oil, and gas reserves. However, when compared to the GDP of MENA’s exporters of energy sources, standing at 4.5%, the US (0.5%) and Canada (1%) are forecast to grow at a slower pace in 2023. Likewise, Europe is expected to record a modest GDP of 0.8% in the EU and 0.9% in the euro area around the same time.
eCommerce is flourishing in every corner of the world
The eCommerce industry is expected to make great strides for key regions around the globe, offering ample growth opportunities for businesses selling online.
Predictions show that the eCommerce sector in the US is primed to be one of the best-performing markets in 2023, surpassing US$1 trillion by 2023 versus US$856.75 billion in 2022. At the same time, Europe’s eCommerce revenue is projected to soar by over 22.5% in 2023 from 2022, totalling an impressive US$730.27 billion. On that note, APAC's eCommerce is set to grow by more than 14%, amounting to US$2,059.58 billion in 2023 versus US$1,802.97 billion in 2022.
When it comes to shopping habits, Middle Eastern consumers present steep divergences in the devices they use to shop from eCommerce brands. While most (65%) digital buyers in the UAE placed their orders on mobile in 2022, most (57%) shoppers in Saudi Arabia went for desktop. On the other side of the globe, LATAM consumers demonstrate strong preference for cross-border shopping, with Chile (73%), Peru (71%), and Mexico (65%) representing the largest share of online purchases across borders.
Identifying what drives global shoppers to buy online and which products they go for is key, as it can help online brands adjust their product offering to consumer demand. Direct delivery at home is the primary reason Europeans and North Americans purchase from digital stores. Yet, as our report observes, the preferred eCommerce categories differ from one region to another. For example, fashion items are predicted to generate the largest revenue (US$230.30 billion) across Europe in 2023, while it’s electronics (US$518.60 billion) for Asian countries and Toys, Hobby and DIY (US$293.90 billion) for US buyers.
Different payment needs across regions
Just as the choice of items that consumers buy online varies across regions, so too are their payment preferences. For instance, the popularity of card adoption continues to sweep across Europe, with most consumers (70%) in Denmark and France (53%) favouring this payment method to shop online. Additionally, Buy Now Pay Later (BNPL) services are preferred by various demographics in the UK – mainly by Millennials (54%) and Gen Z (50%).
By contrast, digital wallets are a prominent payment solution for most Asian shoppers, with high popularity in India (62%), Australia (52%), Indonesia (50%), and China (46%). Digital payments are also a national favourite in the MENA region, as almost nine in ten (85%) of local consumers have tapped into this payment option in 2022. By comparison, both card payments and digital wallets are widely adopted in North America. In Canada alone, credit cards were used by nearly two-thirds (61%) of locals in 2022, while PayPal recorded the highest market share for online payments in the US (82%) and Canada (87%) in the same year.
In terms of LATAM, the region presents stark contrasts in preferred payment methods. On the one hand, the region is facing a digital evolution with bank transfer payment options such as Pix in Brazil noting tremendous growth. On the other hand, consumers in Latin America still tap into cash to complete their online purchases with voucher payment methods such as OXXO in Mexico and Boleto Bancário in Brazil. At the same time, many Brazilian shoppers have started using credit cards (52%) and debit cards (51%) more often in response to rising prices.
Merchants striving to expand in these regions should keep a tailored payment strategy, exploring local and digital capabilities. This way, they're better placed to ensure a successful market entry and substantial business growth.
Extend your business reach abroad with emerchantpay
Expanding your footprint overseas within an ever-changing global eCommerce and payments ecosystem doesn’t sound so outlandish anymore. emerchantpay is ready to prepare you for the next phase in your business. As a leading payment service provider with a global team of dedicated payment experts, we equip you with advanced tools and actionable, strategic advisory to achieve substantial business success in your target market.
Download your copy of Global Payments Outlook 2023 now and unlock key findings about how global economies are rebounding from a year of economic instability. The report also shares insights into evolving attitudes in all things eCommerce and payment methods.
Get in touch with our payment specialists and learn how you can accelerate your business growth for maximum profitability and conversions today.