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Japanese e-commerce giant Rakuten recently invested $ 20 million in Azimo, the UK-based digital money transfer service, a competitor of MoneyGram or Western Union. Visa, Mastercard and Amex announced in April that they were considering merging their rival online payment systems in order to, presumably, challenge PayPal.
These giants of the digital payments industry are all positioning themselves and leading a war for the dominance of this growth space. Uber dominates sharing sharing space, Dropbox file sharing space
Will the payment landscape be dominated by one or two companies, or will there be enough of it? Space for a variety of suppliers? 19659002] The apparent dominance of Visa, Mastercard and PayPal
Visa and Mastercard still visibly dominates the payment landscape. In the United States, Visa and Mastercard account for nearly half of all online payments and, with respect to payments for software purchases, this is a staggering 73% of payments. While this number is lower in Europe, the two card providers account for more than half of payments for software purchases in the old continent: 58% in the United Kingdom, 61% in France and 55% in Italy.
However, PayPal comes in second place, since it accounts for 14% of payments in the United States, 38% of payments in the United Kingdom, 38% in France and 41% in Italy. PayPal has even surpbaded Visa and Mastercard in Germany where it accounts for 58% of payments!
Both solutions meet very different needs, and while PayPal is often considered the most modern solution, Visa and Mastercard have recently made enormous efforts to remain a relevant solution to the era. Digital: "new glossy button" to unify payment options, debit and credit cards without contact.
While AMEX is behind Visa, Mastercard and PayPal while the three compete for the largest share of the market, AMEX
Local payment methods remain popular
Despite the seeming hegemony of these global giants, some countries inside and outside of Europe, such as the Netherlands and China is very attached to the local businesses and the means of payment.
Many countries are still very attached to local means of payment. This is why, despite the rise in digital cross-border payments, local solutions are doing well.
Each country has locally-grown online payment solutions, taking in a significant share of domestic markets and resists very well in intensifying international competition. 19659002] Recent 2Checkout research on software purchases shows that local payments held their market share from 2017 to 2018:
- France: Bank Card: 12%
- The Netherlands: iDEAL : 43% / Direct Debit: 7%
- China: AliPay: 42% / WeChat Pay: 3.5% / UnionPay: 2.5%
- Japan: Konbini: 5.5%
- Brazil: Local credit card with installments: 28% / Boleto Bancario: 12%
- Russia: Qiwi Portfolio: 3% / WebMoney: 2%
Facing a landscape of fragmented payments
While the payment giants are making a lot of noise and leading a war for market dominance, businesses need to understand the online payment landscape will remain fragmented and dynamic. With local payment solutions protecting themselves from global giants and new technologies, the payments market remains very entrepreneurial.
Many new market entrants use new technologies to make payments safer, easier to use, and more profitable
Cryptocurrencies may sound interesting, but recent study shows that more than 60% online traders do not intend to implement cryptocurrencies, while 16% are only looking to implement them, but certainly beyond 2018. adoption, risk and price fluctuation.
Mobile payment methods are revolutionizing the landscape even further. With mobile banking replacing online banking by 2023, smartphone payment will become a common practice. The mobile payments application will become another source of diversity to which small businesses will have to adapt, as the landscape continues to evolve and offers new ways of paying customers.
The way forward for the payments industry [19659002] There is no doubt that the payments industry is changing very quickly and that giants are beginning to appear from all over the world . However, the different speeds of digital adoption and the resistance of local payment methods show that global giants still have to deal with local preferences and strive to understand local markets and newer technologies.
to pay online and new challenges for companies seeking to accept the most means of payment possible. Small businesses looking to expand their reach and exploit all the possibilities of e-commerce will have to look for a payment platform that takes into account the diversity of the payments landscape.
About the Author [19659002] Adriana iordan, Vice President of Product Management, 2Checkout
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