Online Retail Transactions will Reach $4.8 Trillion by 2024
Given the current global economic environment, the retail market has shifted to customer convenience, forcing all surviving retailers to offer more online shopping, coupled with omnichannel payment options.
Moving deeper into the digital era, retailers are now fighting for customer retention and reduced costs through new technologies, such as artificial intelligence (AI), cryptocurrencies, distributed ledger technology, internet of things (IoT) and machine-to-machine (M2M), among others.
Despite these advances, the existing inhibitors to progress — such as payment regulations, fraud and security — must be addressed and resolved. The adequate balance between innovating and reducing pain points will help payment providers stay profitable and navigate ongoing retail transformation.
While credit and debit cards continue to be the focus of online payments, innovation continues to encourage platform-integrated spending. The payment ecosystem, driven by fintech pioneers and mobile apps, has become more interwoven with our mobile devices and is moving consumers into the mainstream of online payments.
Online Retail Payments Market Development
Within the payments space, there lies several opportunities for stakeholders to create opportunities for introducing new and increasing existing revenue streams as well as improving financial inclusion.
According to the latest worldwide market study by Juniper Research, total online retail transaction values will reach $4.8 trillion by 2024 — that’s up from $3.3 trillion anticipated in 2020. This growth will be driven by emerging markets, with China having 62 percent value growth over the next 4 years.
The research identified the Chinese online retail market as a major factor, as well as regions such as Latin America and Africa & Middle East, as improvements in connectivity will enable the rise of online retail in emerging markets.
Juniper analysts urge payment providers to seek new revenue streams in those emerging markets to mitigate slow growth within the developed markets. Accelerating financial inclusion via MFS (Mobile Financial Services), QR code payments and carrier billing will be crucial for this.
The market study also found that mobile payments not requiring a linked bank account offer significant possibilities for eCommerce payments in developing markets.
Moreover, mobile phone penetration is rising faster than banking penetration in developing markets around the globe. Therefore, mobile access is the best way for online retail and payment providers to reach potential new users.
Outlook for Online Retail Payments Innovation
The continuing rollout of Open Banking is driving digital innovation, which threatens to reduce reliance on debit and credit cards. Added to this, the popularity of mobile wallets is having a disruptive effect, with physical cards becoming less important to the payments market.
Accordingly, the research findings suggest that card networks must be proactive, by looking beyond the card, becoming involved in Open Banking initiatives and delivering omnichannel experiences for their loyal customers.
“Card networks must leverage their ability to invest in, and forge partnerships with, key players to gain scale in new areas, or they will fail to diversify their revenue streams and will be vulnerable to future disruption,” said Susannah Hampton, research analyst at Juniper Research.
Originally published at https://blog.geoactivegroup.com.