E-Wallets And Mobile Payments To Eclipse Credit And Debit Cards By 2017

By 2017, alternative payment methods such as e-wallets will be more popular online than credit and debit cards, according to research by Worldpay. Increased smartphone penetration is set to accelerate the development of mobile payment services.

According to the second edition of Worldpay’s Global Guide to Alternative Payments report, such tools will account for 59 percent of all online purchases, an increase from 42 percent in 2012, eclipsing card payments which will fall from 57 percent to 41 percent.

Mobile payment growth

“We’re seeing a transformation in transaction trends,” says Shane Happach, Chief Commercial Officer, WorldPay. “Credit and debit cards have long dominated as the payment method of choice for online transactions. Now, alternative payment methods are forecast to grow significantly faster than total e-commerce and will represent more shopper spend than cards by 2017.”

Of the alternative payment methods currently being used, PayPal accounts for 57 percent of all on-card purchases, while China’s Alipay is second with 20 percent. However the report predicts the value of mobile transactions is set to increase to $117 billion (£70.6bn) from $18 billion (£10.86bn), while card-based e-wallets from the likes of Visa will account for a quarter of all card payments online.

In the UK, e-wallets are currently used for 16.5 percent of all online transactions, with PayPal handling 13 percent of these. However mobile accounts for just 0.65 percent of all payments, a figure which is split between mobile wallets and direct carrier billing. WorldPay believes banks and mobile operators will increase this share with new services.

It says applications such as Barclays Pingit and the Weve e-wallet joint venture between EE, Vodafone and O2 will play a role, but it is worth noting that O2 Wallet will shut down at the end of March, just over 18 months after launch.

What do you know about the smartphones of last year? Try our quiz!