Mobile commerce (m-commerce) continues its ascent to dominance among Americans as it is now the fastest growing shopping channel, growing 15 percent annually in the U.S. – according to new data from leading payments technology company, Worldpay (NYSE: WP; LSE: WPY).
As smartphone ownership continues to grow in the U.S. and around the world, consumers are pivoting from shopping on desktop computers to their phones. M-commerce is predicted to overtake desktop purchases globally by 2023, according to Worldpay’s 2018 Global Payments Report1.
The report found that m-commerce currently accounts for 38 percent of the more than $1.3 trillion in global eCommerce sales. M-commerce is set to grow a staggering 19 percent during the next five years. In 2018, the largest markets in the world for m-commerce are China ($0.75 trillion), U.S. ($0.21 trillion), UK ($63.8 billion), Japan ($34.5 billion) and South Korea ($28.8 billion).
“As new devices hit the U.S. market, smartphone ownership is higher than ever. And with overall better functionality, it’s never been easier to make a purchase from the palm of your hand,” says Casey Bullock, general manager, North America, Global Enterprise eCommerce at Worldpay. “U.S. consumers are turning from their desktop to their phones to make purchases. Merchants must find ways to optimize their mobile payment and shopping experiences, whether through their mobile app, mobile wallet or an improved mobile checkout.”
The rise of m-commerce could also be in part due to Americans’ growing preference for eWallets. Although plastic still holds dominance in the U.S., eWallets are set to overtake credit cards as the most popular online payment method by 2020. As the fastest growing payment method among Americans, eWallet usage is increasing 25 percent annually. However, the U.S. still pales in comparison to China’s eWallet adoption – led by Alipay and WeChat Pay – which accounts for 65 percent of eCommerce purchases.
Other key insights from the Global Payments Report address the biggest trends in payments:
• Millennials: What motivates Millennials culturally, politically and socially also motivates their attitudes about business. Local drivers have the biggest influence on these motivations – meaning merchants must appreciate the extreme diversity of the global Millennial population to truly understand what fuels their purchases and payment behaviors.
• The Now Economy: From binge watching an entire TV series to same-day delivery, greater consumer preference for immediate experiences is clear. This appetite for instant gratification in commerce is extending beyond just delivery and into payments, including “buy now, pay later.”
• Invisible payments: Checkout-free in-store shopping, virtual assistants, and connected cars are just some of the latest examples of how invisible payments are making shopping effortless. The purpose of these seamless transactions is convenience, reducing unnecessary friction at checkout while easing the necessary friction of authentication using emerging and biometric technologies.
The Global Payments Report was compiled using a combination of proprietary data and Worldpay experts, supported by of third-party vendors such as GlobalData, Euromonitor, eMarketer and yStats, publicly available data, and Worldpay’s experts. This year, for the first time, the report covers not only e-commerce but also in-store transactions.
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