Payment Preferences in Developing and Developed Countries
2018-11-05 13:27 Monday
Mobile phones have now become virtual wallets for consumers, and have revolutionized commercial and consumer transactions around the world.
However, whereas mobile payment is ubiquitous in developing countries, contactless payments such as credit cards still dominate the market in developed countries.
Brazilian retail giant Via Varejo has partnered with blockchain payment service provider Airfox, which was launched in February 2018.
Via Varejo, which owns home appliance and furniture chain Casa Bahia, is integrating Airfox's digital banking platform with its own e-commerce platform, as well as in nearly 1,000 of its offline stores. Customers will now be able to purchase Casa Bahia products by paying directly through Airfox.
Compared with mobile payment, British people prefer contactless payment. Cash purchases in the U.K. fell 1% last year, and now account for just 22% of total purchases in the country.
Data from the British Retail Consortium (BRC) indicated that there were almost £20 billion retail transactions every year in the U.K. -that's 54 million transactions a day, or 40,000 a minute. Most consumers prefer to pay with credit cards, which account for 76 % of all retail sales.
Cash continued to decline both as a share of retail transactions and a share of retail sales. The BRC added that the cash decline is partly driven by more consumers using their Nearly 3.4 million people hardly used cash at all during 2017, according to the BBC.
In the U.S., the situation is quite different. Contactless cards are a relatively rare - most issuers don't usually offer them, and therefore most consumers are unfamiliar with them.
"That situation seems to be on the verge of revolution, and we will soon start seeing the same contactless adoption trends emerging in the U.S. Just like what we have seen in the rest of the world, but there need to be credit cards in the market to drive adoption", according to Visa Vice President, Daniel Sanford.
To maintain stable market share, the vast majority of issuers decided to push a contact-only chip card strategy. Their efforts were focused on using near-field communication (NFC) mobile wallets such as Apple Pay. However, the reality is that mobile payment is still in its nascent phase in the U.S.
The latest data projects that the global mobile payment market, currently worth over $ 8.7 billion USD, will see explosive growth at 41.4% CAGR, and will exceed $ 27 billion USD in revenue by the end of 2026.
Asia-Pacific (excluding Japan) is expected to achieve the fastest revenue growth at 44.3% CAGR, while North America and the Middle East & Africa are also fertile regions for rapid growth in mobile payments.