The landscape of online payments is undergoing a dynamic transformation, driven by technological advances and changing consumer preferences.
Along with the growth of digital commerce, alternative payment methods such as Buy Now, Pay Later (BNPL) and digital wallets are poised to transform the future of online transactions in North America.
The rise of digital wallets, BNPL, A2A and instant payments
Traditionally, consumers shopped through offline channels, but the rise of online and social media channels has reshaped how customers interact with businesses. This paradigm shift is accompanied by an increasing openness to explore innovative payment methods, leading to a decline in traditional options such as cash and cards. Digital wallets, BNPL services, bill-to-bill (A2A) payments and instant payment solutions have emerged as frontrunners, with the younger generations showing a remarkable affinity for BNPL and digital wallets such as PayPal.
According to the report “North America Online Payment Methods 2023”, the forecasted transaction value of digital wallets worldwide is expected to exceed 10 trillion euros by 2028. This strong growth points to the widespread adoption of digital wallets among online payment methods.
Credit and debit cards continue to dominate in North America
While momentum is clearly shifting toward new payment methods, credit and debit cards continue to dominate the North American online payment landscape. In April 2023, more than 40% of consumers still consider digital wallets to be more secure than traditional methods. Nearly half of North American respondents prefer a digital wallet even when shopping online, although the majority still choose credit and debit cards.
Enhancing online security with biometric authentication
As consumers accept online payment methods, privacy and security concerns are growing. More than half of respondents are unwilling to share their financial data online, prompting payment providers to explore innovative solutions such as biometric authentication. Nearly 50% of U.S. consumers believe that fingerprint, voice recognition, iris recognition, and other biometric authentication methods make digital payments more secure, signaling a potential shift in perceptions of online security.
In response to growing privacy concerns, payment providers around the world are using biometric authentication methods to increase the security of online transactions. Biometric authentication, including fingerprint, voice recognition, and iris recognition, is becoming increasingly accepted as a reliable means of protecting against potential data breaches.
In summary, the online payments landscape is witnessing a transformative shift away from traditional methods towards contactless alternatives. QR code payment, digital wallets, BNPL and other emerging trends are reshaping the future of online transactions. As technology continues to evolve, it will be fascinating to watch how consumers and businesses adapt to and adopt these evolving payment methods, ensuring a seamless and secure online shopping experience for everyone.
From yStats.com
Known as the primary destination for e-commerce industry analytics and payments market data, yStats.com is a leading secondary market research and business intelligence firm specializing in global B2B and B2C e-commerce, payments and fintech trends. Founded by Yücel Yelken in 2005, the company produces comprehensive market reports and analyses. yStats.com offers essential insights, forecasts and statistics primarily through comprehensive market reports. His reports commissioned by multinational corporations, including Fortune 500 companies, investors and organizations have been featured in Forbes, The Wall Street Journal and the World Economic Forum.