Whenever you make a monetary transaction electronically, be it transferring an amount or paying for a product or service purchased online you make use of an e-payment system. As an alternative to the traditional method of transacting via cash, e-payments offer you much more flexibility and mobility.
With the rise of the ecommerce market, e-payments system has naturally received a universal push to the forefront of the payments market. With smartphones becoming ubiquitous, retailers can reach the customers anywhere, anytime and vice versa, e-payment further adds to the convenience by bringing to the consumer’s fingertips their bank, no more worrying about cash withdrawal every time youseek to make a purchase online.
Another key reason is the security associated with e-payment gateways. With the banking sector sinking huge amount of funds in ensuring the highest level of encryption in online transactions one can safely assume that e-payments systemsare the future of payment. Accessibility to all the transaction records 24×7 in case of digital payments as opposed to the untraceable nature of cash payments gives another strong reason to support e-payments. The market too has grown to be highly receptive of this technology and now e-payment gateway owners are releasing their e-payments systems making them compatible most of the smart devices today.
The Middle East
But digital payments wouldn’t be in the current position had it not been for the explosive growth of the ecommerce market. For instance,following the launch of Saudi government owned Noon.com, an ecommerce portal which is valued at USD 1 billion, Saudi Arabia has emerged as one of the biggest markets for e-payment gateway trailing behind only the online payment gateways in UAE, states Payfort.
Also stated by Payfort in its report is the size of the digital payments market Saudi which were recorded at around USD 8.3 billion for the year 2017. The annual growth clocked was 27%. Payfort also estimates the size to more than double to USD 22 billion in the next four years.
But when compared to payment gateways, UAE the uptake is still miniscule. The cash payment method is still the prevalent way of paying for online shopping among 46% of Saudis. The same stat for digital payment methods stands at 29% and is expected to grow in the next several years.
Another solid example of ecommerce leading to consolidation and expansion of digital payments methods is India. It is predicted that in the next 5 years the ecommerce market in India will be twice the size it is today. This will primarily be driven by the emergence of digital payment methods like, credit cards, e-wallets, internet banking. Add to it the country’s demonetization drive has created opportunities for shoppers to shop online where it was impossible earlier.
These conclusions have been published in Worldpay’s annual Global Payments Report. The survey comprised markets in 36 different regions across 5 continents. The report also derives the fact that ecommerce market in Asia-Pacific will expand to USD 2,100 billion by the time 2021 rolls aroundat the rate of 12% per annum with India being the fastest growing market of the region.
The greatest contribution to the global digital payments market comes from North America, thanks to its highly advanced digital payments infrastructure. In 2017, Americans did 24 percent of the total digital spending via smartphones. Thus, even the ecommerce mobile app market is significantly mature in America. It is in fact so far ahead of the curve that it contributes about a third of the total global digital payments volume. This is claimed by report from Ingenico.
E-commerce mobile applications and electronic payments together bringing the merchants closer to their international customer and conduct business with them more conveniently. Not only this the increase in the usage of online payment methods contributes to the growth of economy. According to Moody, if the digital payment usage rates increase by 1 percent then on an average the GDP grows by 0.04 percent which roughly translates to a USD104 Billion increase in the consumption of goods and services.
Aside from boosting the GDP even the ecommerce expansion goes hand in hand with rising digital payment market. And even though the no. of digital buyers in America is still third highest after APAC and Western Europe at nearly 210 million, the extent of accessibility to electronic payments method is still the highest at 78 percent of population which will make online payments in 2018. The smartphone boom has created several opportunities for digital payments to flourish. Be it an ecommerce iphone app or any android application emerging services likethe shopping cart app development have caught steam thanks to ecommerce and the convenience of a electronic payment system.
Rakesh Jain is a CEO and Co-founder of Mobicommerce, an eCommerce website & mobile app development company having a team of best app developers who deliver best eCommerce solutions mainly on Magento and PrestaShop platform. He regularly contributes his knowledge on the leading blogging sites. You can connect with him on Twitter.