North America online payment methods
Even before the coronavirus pandemic, North America was one of the world’s leaders in the number of online payment methods used. North American companies often offered the latest online payment technologies that were later used around the world. The payment infrastructure in this region was set up very well, many considered it almost perfect. At the same time, most North Americans had already formed certain habits to pay one way or another, which companies could predict.
The Obvious Problem
Although North Americans could easily choose one or more of hundreds of payment methods, they were very attached to credit cards.
Sometimes there were so many credit card payments that the payment systems simply didn’t have time to process them, leading to numerous glitches and problems processing those payments. However, there is a positive trend in recent years to reduce the attachment of North Americans to credit cards.
The Global Payment Report says that by 2023 the use of credit cards by North Americans will decrease by approximately 27%, while today credit cards account for approximately 35% of all consumer spending.
However, some decline in the popularity of credit cards does not mean a similar decline in the popularity of credit. In 2023, retailers will generate 42% of their revenues from credit. By comparison, Canadians continue to go crazy about credit cards, which account for more than half of their spending. Americans are more practical in this regard and prefer to choose several methods of payment.
The same Global Payment Report suggested that a significant portion of credit card spending over the next five years will be split between digital and mobile wallets. North Americans have never forgotten about alternative payment methods, and residents have always chosen the one that is easiest and most convenient for them.
Serious market growth potential
Today, by sales volume, the United States is the second largest e-commerce market in the world. In this indicator, they are second only to China. Despite this, this market has huge potential for growth, because if you look closely, we see that e-commerce is not the main channel for shopping in the U.S.
If you look at all U.S. retail sales, you will find that online retailing accounts for no more than 8.9% of that volume. By contrast, China has 23.1% of the total.
The good news is that the latest figures show that 78% of all Americans shop online. The biggest sellers are eBay, Amazon and Apple.
The growing popularity of e-commerce in North America will directly depend on the activity of the companies themselves, their willingness to innovate and invest in their own development. For example, between October and December 2018, Walmart was able to increase sales by 43% thanks to offering its customers new products, as well as investing a serious amount in upgrading its logistics system and providing customers with additional options in terms of product delivery.
As for priority payment methods in North America, credit cards will no longer be a priority online payment method in 2023. Residents of this region will increasingly choose alternative payment options, and mobile and digital wallets will be especially popular. In 2023, they will account for approximately 37% of all North American spending.
In addition to the significant growth in mobile and digital wallets in North America, the Buy Now Pay Later solution will be especially popular, according to the aforementioned report. Companies such as Klarna, Afterpay, Affirm will show the greatest growth in market share, and they will achieve a three-fold increase in e-commerce market share from 1% to 3% in 2023.
The bottom line
It is already clear how important the role of online payments in the world will be. Moreover, in order to win in the competition, you need to give your customers the maximum choice of payment methods. Contact PayOp right now and we will offer you the best conditions of cooperation and your clients more than 300 different methods of payment.