Total eRetail transaction values will reach $4.8 trillion by 2024, up from $3.3 trillion in 2020, according to a new report from Juniper Research. This growth will be driven by emerging markets, with China having 62 per cent value growth over the next 4 years.
The research identified the Chinese eRetail market as a major factor, as well as regions such as Latin America and Africa & Middle East, as improvements in connectivity will enable the rise of eRetail in new markets.
The new research, Strategies for Payment Providers: Industry Trends, Opportunities & Recommendations 2020-2024, urges payment providers to seek new revenue streams in emerging markets to mitigate slow growth in developed markets.
Accelerating financial inclusion via MFS (Mobile Financial Services), QR code payments and carrier billing will be crucial for this. The research found that mobile payments not requiring a linked bank account offer significant possibilities for ecommerce payments in developing markets.
The research also found that mobile handset penetration is rising faster than banking penetration in developing markets, meaning that mobile access is the best way for eRetail and payments providers to reach potential users.
The continuing rollout of Open Banking is driving digital innovation, which threatens to reduce reliance on debit and credit cards. Added to this, the popularity of mobile wallets is having a disruptive effect, with physical cards becoming less important to the payments market.
Accordingly, the research suggests that card networks must be proactive, by looking beyond the card, becoming involved in Open Banking initiatives and delivering omnichannel experiences for users.
Research author Susannah Hampton said, “Card networks must leverage their ability to invest in, and forge partnerships with, key players to gain scale in new areas, or they will fail to diversify their revenue streams and will be vulnerable to future disruption.”