- FCA fines UBS £27.6m for transaction reporting failures
- S&P report says increasing disclosure could shine more light on bank resolvability
- Equfund relaunches Reap to address housing shortage
- Lloyds CEO gives up final salary pension after growing pressure
- Millennials are using "chat" to discuss investments with wealth managers, says GlobalData
- NatWest launches ‘Back Her Business’ female-only crowdfunding
- Barclays to sponsor the FA Women's Super League expired
- Cambridge & Counties joins National Association of Commercial Finance Brokers expired
- Lloyds commits over £9m to support SME apprenticeships in the UK expired
- Buy-to-let market beats gold, cash and fine art for investment returns, finds VeriSmart expired
- UK's wealthy frustrated by struggles with high-street banks, says BML expired
- Brexit has inflicted serious damage on UK financial services, says deVere expired
17th April 2018
Alternative payments will soon overtake online card payments in the UK, says GlobalData
With e-commerce growing significantly and more products and services becoming available online, consumers in the UK have started looking for faster and more convenient ways to make online payments, and are increasingly turning to alternative payment tools to meet these needs, according to GlobalData.
In 2012, online card payments dominated, with a 59.7 per cent market share by value of transactions online, while alternative payment tools (dominated by PayPal) only held a 30.8 per cent market share. Over the last five years, however, numerous alternative payment methods have launched in the UK, including Apple Pay, Visa Checkout, and Google Pay.
This has led to a shift towards alternative payment tools, and has translated into significant market share growth, reaching 41.7 per cent (£62.4bn, up from £48.3bn in 2016) in 2017. At the same time, card payments decreased to 45.8 per cent (£68.6bn, up slightly from £68.4bn in 2016) of total online spending. Given these figures, the share of B2C e-commerce paid by alternative payment methods is expected to surpass cards by the early 2020s.
Madalina Aghinita, Financial Analyst at GlobalData, said: “Despite the positive forecast for 2018 spending, the year has so far seen a number of physical stores close down, and it is likely that there will be acceleration in this respect. More consumers are moving towards online shopping in order to save time and ensure they get the best value for money – particularly given the performance of the economy.”
GlobalData’s E-commerce Analytics database shows that the UK is the largest e-commerce market in Europe, with a market size of £149bn, and growth of 12.8 per cent in 2017 compared with 2016. Based on the current growth rate, it is expected that UK e-commerce will exceed £200bn by 2021.
The growing digital channels are disrupting not only the retail landscape, but also cash and card payment methods. Internet penetration has facilitated the growth in e-commerce, with 89 per cent penetration in 2012 and 96 per cent in 2017. Technology has innovated the way consumers shop online and pay for their products or services.
Ms Aghinita said: “Consumers want a quick and frictionless payment process, and having to enter their card details every time they purchase something online, or the unavailability of their preferred method of payment, can be frustrating and lead to shopping cart abandonment. Retailers need to understand the benefits of these alternative payments and work closely with payment processors, in order to ensure customers are happy when it comes to parting with their money.”