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Digital wallets are battling for market share in the e-commerce sector

By Puja Sharma

June 10, 2022

  • APAC
  • Cross-Border eCommerce
  • DIGITAL PAYMENT APAC
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Digital wallet, eWallet

Physical goods dominate European eCommerce spending, while digital services and travel continue their slow recovery according to the Nexi 2021 eCommerce Report. Post-pandemic payment trends continue to evolve, with German consumers now choosing eWallets above long-time favourite open invoicing, while Italian consumers signal strong confidence in the security benefits of PayPal, according to the latest eCommerce Report from European PayTech Nexi Group.

Europe’s eCommerce trends revealed: that eWallets overtake invoices in Germany, while PayPal dominates Italy. The 2021 eCommerce Report conducts a deep dive into data from Austria, Denmark, Finland, Germany, Italy, Norway, Sweden, and Switzerland, where a collective €493b was spent last year.

“The Nexi European eCommerce Report 2021 shows that while consumers expect their payments to be secure, they still value convenience and simplicity when conducting online transactions,” said Omar Haque, Head of Group E-commerce at Nexi Group.

“It’s likely that consumers now have greater trust in purchasing products online than before the pandemic, which could have helped democratise online purchases across all categories in Europe,” he said.

Haque further added, “Understanding what makes consumers abandon a cart, such as not being offered their preferred payment option, is critical to improving sales, and stores that can enhance this aspect of the experience stand to win the most. This new report offers eCommerce businesses deeper insights into consumer behaviours across Europe so they can tailor their offer and grow their business.”

FinTech companies in emerging markets attracted significant investments to expand their product portfolios and foray into new markets. The region’s key digital wallets gained substantial market share in the last four to six quarters primarily due to rising adoption and technological advancements. Moreover, with the strong growth of the e-commerce market in this region and the demand for cashless payment methods, the publisher expects the prepaid card segment to benefit significantly.

The APAC market

Digital wallets are building partnerships to launch prepaid cards in the Asian market. With higher demand for digital payments across online and brick-and-mortar stores in the country, digital wallet providers are launching innovative prepaid card solutions to capture more market share.

According to the report by an Asian banker, A vast majority of in-store payments are made with digital wallets in the Asia Pacific region, with nearly 40% of all payments made at point-of-sale. In Asia, China leads the e-commerce market in terms of using digital wallets for payment, accounting for 72.1% of all online purchases. With the rapid adoption of mobile shopping, Singapore’s eCommerce market is projected to reach SGD 9.3 billion ($7b) by 2020.

As a result of growing adoption and technological advancements, the region’s key digital wallets gained significant market share in the last four to six quarters. Additionally, the publisher expects the prepaid card segment to enjoy significant growth because of the strong e-commerce market in this region and the demand for cashless payment methods.

Key findings

  • When given a choice, German consumers will almost always opt for eWallets. 39% prefer this method, compared to 23% who prefer paying by invoice.
  • Austria shares this new love for eWallets (25%), favouring simplicity, security and speed.
  • Italy markedly prefers PayPal (50%), with 58% citing security as a critical factor in their decision. The second favourite option is debit cards at 19%.
  • Danish consumers overwhelmingly prefer credit card payments (51%), but over a third (34%) prefer the simplicity of MobilePay.
  • Consumers in Finland still prefer “traditional” transaction technologies like online banking payments (34%) and credit cards (24%), while newer payment methods like PayPal and MobilePay still have ground to make up for.
  • Local payment methods, like VIPPS in Norway (23%) and Swish in Sweden (19%), remain popular.

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