With e-commerce driving the growth of alternative payments at a pace well over the normal speed limit, it is tempting to focus on the one payment method that appears to be growing fastest. But trying to choose a winner misses the big picture.
It is clear that cash is no longer king. Where credit cards looked certain to take its place, they too are losing momentum as commerce moves online. The rise in alternative payment methods (broadly defined as not cash and not cards) is undeniable, and mobile wallets are a strong contender for the podium. As a percentage of global e-commerce payments, between 2020-2024, credit cards are expected to decrease from 22.8% to 20.8% while mobile wallets are expected to grow from 44.5% to 51.7%.
Mobile wallets offer customers a wide range of payment methods. In a recent Sunday Times (UK) article, Bango CMO Anil Malhotra highlighted that although some digital wallets, such as Apple Pay, act only as a vessel for existing payment methods (like a physical wallet), a growing number of e-wallets now have a function that enables users to visit a shop or ATM to deposit cash that then becomes electronic money in their wallets, opening new avenues of payment for cash-reliant people. The demographic using wallets is varied, but consumers all over the world are choosing to pay with them. Why? It’s quick, easy, secure and often comes with customer rewards.
However, other alternative payment methods are not to be overlooked. Direct carrier billing continues to grow and is expected to take an additional $30B of End User Spend (EUS) by 2024. More recently, subscription bundling – where after an initial offer period the customer agrees to have on-going subscription payments charged to their telco/utility/shopping bill – has entered the race and is quickly gaining traction. Suddenly, a much wider range of billing methods have become available as generic ways to pay online, especially for digital services.
Which payment method is best?
Well, that is down to each individual customer which is why, as a platform, Bango is agnostic on payment methods. Our focus is on connecting a purchase to any bill the customer chooses; wallets, mobile carrier billing, bundling – whichever makes sense. We see strong growth across all these areas, so whoever the winners are – and there will be more than one – Bango enables the alternative payments race to be run!