With the increased digital adoption, the M-Commerce market value was predicted to grow at CAGR 8% over the 5 years from 2020
The global online payments market grew over the past year, encouraging the adoption of online payments. This also prompted the increased usage of digital wallets, with the number of users predicted to rise by 1 billion between 2020 and 2025, and the digital wallet spending forecasted to nearly double by 2025, making up around half of the total wallet spending. Meanwhile, M-Commerce value was predicted to grow at a CAGR of almost 8% through 2025, prompted by the substantial rise of online services usage after the COVID-19 onset. Additionally, consumers worldwide rapidly adopted QR code payments, which were forecasted to surge in the number of users and to account for nearly 3 in 10 of all mobile users. Another payment method that is expected to surge between 2020 and 2025 is instant payments.
Consumers in North America opted for contactless payments to avoid in-person interaction when shopping in 2020
The North American online payment industry has progressed substantially after the onset of COVID-19 prompting consumers and merchants to adopt online technology. Customers changed their preferences towards seamless payments, such that significant growth in the number of proximity mobile payment users is predicted in the US to exceed 120 million in 2025, a number representing nearly half of the market of smartphone users in the country. Canada was also forecasted to see an increase in mobile commerce in 2020, to reach slightly over CAD 17 billion. This ongoing shift to online when making payments amid the pandemic had several drivers. In Canada, the major one was making fewer in-person payments and also because the online method permits accurate tracking of spending, as well as providing a seamless experience at checkout.
Credit and debit cards led other payment methods when shopping online in North America in 2020
Consumers in both Canada and the US shared somewhat similar preferences with regard to payment means used when shopping online. The US consumers preferred credit and debit cards with well over 50% of adults opting for them, while digital wallets were only in the third place, according to surveys cited in the yStats.com report. In Canada as well, credit cards prevailed among the consumer preferences with debit cards following them as the second preferred form of payment when shopping online, with digital wallets in third place, as of April 2021. Moreover, the acceptance of multiple digital payment methods gained momentum, with more consumers using two or more methods in the US in 2020. With regard to digital wallets, Apple Pay was expected to be the US market leader with the highest number of users of around 40 million in 2021.
BNPL continued gaining momentum in North America in 2021 with increased service provider app downloads.
Buy Now Pay Later solutions have also been adopted by consumers in the region, with over half of US consumers being inclined to use it if their trusted payment service provider offers the service. The top four BNPL service providers in the US, based on the number of downloads were Klarna, Afterpay, Quadpay and Affirm. Customers in the US were motivated to use BNPL for purchases that otherwise would not fit in the budget, to avoid paying credit card interest and to borrow money without a credit check.