Retail spend is expected to increase by $6 trillion globally between 2018 and 2023, taking total spend to $30 trillion, with growth driven by a combination of alternative payment mechanisms (most notably wallets) and online spend.
The figures are contained in a new study from Juniper Research which also identified a range of strategies for payment providers to deploy if they are to maximise their opportunities across both the offline and online space.
Stakeholders, however, face a host of competitive and regulatory challenges if they are to take full advantage of the opportunity. According to the study, Strategies for Payment Providers: Opportunities, Risks & Competition 2019-2023, reducing friction at checkout remains a key hurdle, with online cart abandonment rates high.
Meanwhile, the research highlighted that, in many markets, in-store spend will plateau or even decline; increasing the likelihood that major retail chains may be obliged to scale back their physical presence even further.
The research also assessed strategic approaches of over 40 payment processors, mobile wallets and telco payment providers; comparing their capabilities, breadth and depth of their service offerings and future prospects in a series of heatmaps and Juniper Leaderboards.
The study argued that cart abandonment rates can be reduced by a combination of measures, including implementation of card-on-file, one-click payment solutions and ensuring that both popular local payment currencies and checkout procedures are on offer.
Meanwhile, a Juniper fraud mitigation ROI analysis found the scale of potentially lost revenue, either through false positives, costly manual reviews or chargeback costs, was substantially greater than the costs of robust FDP (Fraud Detection and Prevention) solutions.
According to research author Dr Windsor Holden, “Service providers must focus on highlighting the bottom-line benefits of identifying genuine transactions as a priority over simply promoting the ability to reduce transaction or account fraud.”