Global payment report on e-commerce payment methods (overseas shopping mall payment)
by 300cbt Team·
E-Commerce Global Payment Report
The ultimate goal of e-commerce and the last step of the purchase funnel is sales. Since sales = payment completion, payment method is an important part of e-commerce. If your target market is Russia, it makes sense for your shopping mall to offer payment methods commonly used in Russia. Aren’t you curious about what payment methods are commonly used in each country? In this post, we will learn about the global payment environment based on data provided by World Pay, one of the world's largest PG companies.
Domestic EC (e-commerce) hosting payment
The payment environment in the domestic shopping mall builder market, dominated by Naver Smart Store and three EC hosting companies (Makeshop, Cafe24, and Godot Mall), can be summarized as follows.
- Mail order business report, escrow, and warranty insurance are required.
- Fixed card fee agreement with 3 EC hosting companies
- Except for self-developed shopping malls, it is virtually impossible to add payment methods.
All three EC hosting companies advertise the title of having no PG subscription fees. This takes the pressure off for merchants starting out, but there are some things you need to know. Whether sales are 100,000 won or 1 billion won per month, the same fixed fee of 3.5% (excluding VAT) is charged. In principle, it is impossible to renew a contract for payment fees based on sales. Additionally, recently widely used services such as Kakao Pay and Toss cannot be added to the shopping mall unless the hosting company develops a module.
Overseas EC (e-commerce) hosting payment
In the case of overseas shopping malls, numerous payment modules that have already been developed are freely available. Of course, this freedom presupposes that you must be able to handle code. A representative example is the WordPress shopping mall (WooCommerce). Shopify and Big Commerce, leaders in EC hosting, have payment-related apps already built in the backend, so merchants can use that payment method right away by simply selecting a payment method and entering their account information. Most merchants offer payment methods such as PayPal EC (Express Checkout), Stripe (STRIPE), 2co, Amazon pay, and Google Pay. Shopify provides its own payment system, Shopify Payment, linked to Stripe.
- Authentication required only when signing up for PG
- Discount rate based on sales volume, dedicated management service provided
- Various payment methods can be added
▲ Payment gateway services provided by Shopify
▲ Payment gateway services provided by Big Commerce
Global payment trends and prospects
In addition to PayPal, the most widely used digital wallet (eWallet) in the world, let's find out what credit card brands and additional payment methods are used in each country. This content was written based on data from WorldPay, Forbes, and Visa sites.
▲ Universalization of payments through electronic wallets
By 2021, the usage rate of Credit Card and Debit Card (debit card, check card) is expected to decrease, and the usage rate of eWallet (electronic wallet such as PayPal and Alipay) is expected to increase rapidly. Additionally, as the payment method of directly entering credit cards decreases and electronic wallets become more common, payments through electronic wallets are expected to exceed 50%.
▲ Expansion of secure payment methods through biometric authentication
When making overseas payments, issues such as fraud and chargeback inevitably arise. Accordingly, each payment company has developed its own screening and filtering technologies. Recently, startups related to fraud filtering, such as SIGNIFYD, have also received large-scale investments and are growing. Amid this trend, filtering through biometrics is also receiving great attention, and this is expected to increase further. Representative biometric identification methods include fingerprint recognition, iris recognition, heart rate recognition, facial recognition, and palm vein scanning. I also use fingerprint recognition to unlock my phone. I found it very comfortable to use.
Apple's recently released iPhone X also uses biometric login technology as an advertising material. The first e-commerce payment system using biometrics is Mastercard's "Selfi e pay".
▲ Silver Surfer: A term referring to older people who are skilled in using smart devices such as the Internet and smartphones.
The elderly population aged 60 or older, who have greater spending power and greater disposable income than previous generations, is attracting attention. Their spending power is expected to reach $1.5 billion by 2020, double that of 2010. In Hong Kong, 71% of the elderly population participated in online shopping in the past 12 months, in the United Kingdom, from 13% to 78%, and in Switzerland, it is currently 65%. 82% of the elderly population is using online shopping.
These figures are due to the increase in smartphone use among the elderly population, with almost half of internet users aged 65 to 74 using social media. My father is a smartphone user who cannot send text messages.
▲ Expansion of the subscription payment market
Subscription services and on-demand services such as Amazon Prime, Netflix, and Spotify (music streaming service) are expected to continue to expand. There are currently 85 million Amazon Prime members, a 35% increase compared to 2016. Subscription services are also an active field in the retail market, forming a variety of vertical platforms ranging from services that rent luxury watches such as Eleven James to Memebox, which is considered a successful domestic model for beauty subscription services.
Online payment methods | North America
▲ Analysis of the US online payment market
The payment environment in the United States, which is considered the country with the highest spending power in the world, has already become a global standard. Most payments are made with credit cards, and recently, the electronic wallet market such as Apple Pay, Google Pay, and Samsung Pay has been growing rapidly. Visa Checkout is a simple payment service for Visa card users and is provided at major shopping malls such as Best Buy, Starbucks, Walmart, and Under Armor.
▲ Canada online payment market analysis
In Canada, credit card usage accounts for 70% of all e-commerce. As of 2016, the mobile payment rate among smartphone users is 33%.
Online payment methods | South America
▲ Analysis of the Brazilian online payment market
Brazil is the largest consumer market in South America, also known as the BRICs country. More than 60% of online payments are by credit card, but currently only 20% of credit cards can be used for overseas payments. The remaining 80% of cards are for domestic use only, meaning overseas payments are not possible.
With 55 million people in Brazil (about a quarter of the total population) without bank accounts, the use of boleto bancário, a service similar to a bank transfer, has become common. Boleto Bankario is an ATM money transfer service available at 48,000 ATM machines across Brazil.
▲ Argentina online payment market analysis
Argentina is a market that is attracting attention due to recent deregulation of e-commerce. Mercado Pago is commonly used as an alternative payment method. Mercado Pago, a powerhouse in the South American payment market, is South America's largest e-wallet service company with 90 million users and is operated by its parent company, Mercado Libre (South America's largest e-commerce marketplace). Mercado Libre (Free Market), meaning Mercado=Market, Libre=Free, is the largest marketplace in South America, established in Argentina in 1999. It used to be owned by eBay but now operates independently.
▲ Mexico online payment market analysis
Mexico is the second largest e-commerce market in South America. Currently, credit card payments are decreasing and the e-wallet payment market is increasing significantly. Currently, the payment rate using PayPal and Mercado Pago is increasing.
▲ Colombian online payment market analysis
In the payment market in Colombia, which has a population of approximately 50 million people, bank transfers and COD (Cash on Delivery: cash payment to delivery drivers when products are delivered) are common. However, due to the recent surge in smartphone use, mobile electronic wallet payments are expected to increase in the future.
Online payment methods | Oceania
▲ Analysis of the Australian online payment market
Australia, along with the United States and Europe, is a market that many domestic sellers are targeting, and most payments are made using credit cards and electronic wallets. Additionally, as of 2016, 20% of all e-commerce payments were made through cross-border (overseas direct purchase). PayPal is the most widely used electronic wallet, and B PAY , an electronic bill service in Australia, is also widely used. Recently, the merchant usage rate of Afterpay , which provides installment payment services, has also been increasing significantly.
▲ New Zealand online payment market analysis
New Zealand is geographically in a similar economic zone to Australia, and the payment environment is also similar. The most active marketplaces are Amazon and Alibaba. As approximately 90% of the population owns a smartphone, mobile payments are expected to increase further in the future.
Online payment methods | Asia
▲ Analysis of China’s online payment market
China, which is now attracting attention as the world's largest consumer country among the world's factories, is a market where mobile payments have already become part of everyday life, led by Alipay. If targeting the Chinese market, introducing Alipay, WeChat Pay, and UnionPay payment systems is essential.
▲ Hong Kong online payment market analysis
As Hong Kong is a city of international trade, credit card and electronic wallet payments are common. 90% of the population uses the internet, and the leader in electronic wallets is Alipay.
▲ Analysis of India’s online payment market
India, known as the next China, has the most active banking transactions with Paytm, India's native electronic wallet that has been in service since 2010.
Russia, with a population of over 150 million people, is actively using Yandex Money and Web Money as it is a Yandex country, in addition to debit cards. Both services are native Russian fintech services.
▲ Analysis of Japan’s online payment market
Is it because Japan, an economic powerhouse and the second-largest market in Asia, has its own culture? Compared to English-speaking countries of similar economic level, the payment rate through e-wallets is very low. If you are targeting the Japanese market, you should also consider introducing offline payment systems through convenience store payments such as Konbini, kiosk payments, and ATMs such as Pay-easy.
▲ Analysis of the Korean online payment market
Most people in Korea use smartphones, so much so that global IT companies use it as a test market. Accordingly, the mobile payment market has grown rapidly. Most online payments are made with credit cards, and the domestic cards shown in the graph are BC cards. BC Card has partnered with most banks and has become the most commonly used credit card brand in Korea.
▲ Analysis of Singapore online payment market
Singapore is the country most often chosen by global companies as a bridgehead for entering the Asian market due to its English-speaking and tax benefits. Payments are also similar to those in English-speaking countries.
▲ Malaysian online payment market analysis
In Malaysia, where the government announced plans to double the e-commerce market by 2020, the mobile payment market is growing rapidly.
▲ Indonesian online payment market analysis
Indonesia is a country with expected growth rates in the future based on its population of 260 million people. INDOMOG is an Indonesian PG service.
▲ Analysis of the Philippine online payment market
In the Philippines, most transactions are currently through COD, but payments in the form of electronic wallets such as PayMaya and PayPal are expected to increase in the future.
▲ Taiwan online payment market analysis
40% of online purchases in Taiwan are made on mobile. The rate of credit card use is high, and the use of electronic wallets such as ibon and Alipay is also increasing.
▲ Thailand online payment market analysis
The Thai government is also implementing e-commerce growth policies similar to Indonesia. Currently, only about 50% of the population uses the Internet, but it is clear that this is a market with great potential for future growth.
▲ Analysis of Vietnam online payment market
Vietnam is currently growing rapidly with a population of 100 million. In recent years, many domestic and foreign companies have moved their production facilities from China to Vietnam. This Vietnam rush is expected to continue for some time. The number of smartphone users is expected to double by 2020, and electronic wallets are expected to become a dominant payment method.
Online payment methods | europe
▲ Analysis of the UK online payment market
In the UK, davit, credit, and electronic wallets are used equally, and the Visa card usage rate is 82%.
▲ Analysis of the French online payment market
In France, like the UK, credit card payments are active, but Cartes Bancaires , a local card called CB, is recorded to have the highest usage rate.
▲ German online payment market analysis
▲ Analysis of the Belgian online payment market
Belgium is one of the top 10 markets in Europe, and although payments through bank transfers are still the largest, the e-wallet market such as PayPal is expected to grow significantly in the near future.
▲ Analysis of the Italian online payment market
In Italy, PayPal, credit cards, and Postepay are most widely used, and payments through COD are also active.
▲ Analysis of the Swedish online payment market
Sweden is recognized as a virtually cashless country. Just as it is difficult to live without Alipay in China, paying through Swish is said to be common in Sweden.
▲ Danish online payment market analysis
Denmark is the country with the second highest mobile payment rate in Europe, and electronic wallet payments are commonplace. Klarna, a unicorn fintech company, is a representative example.
▲ Analysis of the Norwegian online payment market
Norway, like Denmark, is a mobile commerce powerhouse with a mobile payment rate of 69%. Northern Europe has already been taken over by Klarna.
▲ Analysis of the Netherlands online payment market
The Netherlands has a very high usage rate of iDEAL, which is called the Dutch PayPal.
▲ Analysis of the Spanish online payment market
Mobile shopping in Spain doubled between 2015 and 2016.
If you operate or plan to operate an overseas shopping mall (reverse direct purchase), you should consider introducing payment methods in key target markets based on this data. Since buyers' preferred payment methods have a significant impact on purchase conversion rates, if you are targeting English-speaking markets, it is essential to introduce a payment system that is commonly used in North America and Europe. With the recent rapid increase in the cross-border payment market, fintech companies that bundle payment methods into one package are also growing rapidly. These companies are called PSPs (Payment Service Providers). Recently, eBay also announced that it would effectively scrap the single payment option through PayPal and provide a PSP sign Adyen service. Don't forget that a payment system optimized for the target country is essential in order to enter the global market.