FIS study reveals Cash bids a hasty retreat amid POS contraction
By Pavithra R
Financial service technology provider FIS has announced a new report citing escalating growth in eCommerce spending in 5 years and decline in usage of cash for in-store payments, as global consumers made increasing use of mobile wallets and other alternative payment methods in 2020 during the pandemic.
The annual Global Payments Report by Worldpay from FIS, examining the current and future payment trends across 41 countries, shows that lockdowns, shelter-in-place orders and personal safety measures during the global health crisis accelerated the shift toward digital payment methods in consumer spending.
The FIS report reveals:
- Globally, the use of mobile wallets exceeded cash for in-store payments. Cash usage dropped 10% points in 2020 to account for just one-fifth of all face-to-face payments worldwide.
- Use of cash for in-store payments fell by half or more in Canada, the U.K., France, Norway, Sweden, and Australia.
- Cash payments in the U.S. made up $1 tn of in-store payments in 2020, down from $1.4 tn in 2019.
- The Asia-Pacific region continues to lead in the use of mobile wallets at point-of-sale, with about 40% of in-store payments in that region being done through contactless payments. However, the use of mobile wallets accelerated across all regions in 2020 and accounts for about 10% of payment methods in North America, 8% in Middle-East-Africa, 7% in Europe, and 6% in Latin America.
“Our new research shows that the world is entering a new phase of adoption of digital payment methods. The global pandemic has brought a cashless future closer on the horizon. The implications for merchants are profound. They must be building technology-centric strategies to meet the diverse preferences of consumers’ rapidly changing habits and do so in a way that drives financial inclusion for underserved communities around the world,” said Jim Johnson, Head of Merchant Solutions at FIS.
The report projects that by 2024, cash will account for less than 10% of in-store payments in the U.S. and just 13% of payments worldwide. The report also forecasts digital wallet payments to account for more than a third of all in-store payments(16% in the U.S.)
“For those businesses that are savvy enough to embrace smarter commerce and invest, the growth opportunities will be huge and potentially game-changing,” added Jim Johnson.
The report also found eCommerce spending accelerated in 2020 during the pandemic, with:
- Total eCommerce spending grew globally 19% last year to $4.6 tn in value. The analysis shows global eCommerce spending could grow to $7.3 tn by 2024.
- Globally, usage of digital wallet-based transactions in 2020 grew 7%. By 2024, the report projects that digital wallets will account for more than half of all eCommerce payments worldwide.
- The reports show the adoption of buy-now-pay-later (BNPL) transaction methods continues to rise rapidly in Europe and North America and is expected to double by 2024.
- Conversely, usage of traditional payment methods such as cards and cash-on-delivery are quickly dwindling in share and expected to account for less than 40% of eCommerce transaction payment methods by 2024.
Established in 1968, FIS is a provider of technology solutions for merchants, banks, and capital markets firms globally. It is a Fortune 500 company and is a member of Standard & Poor’s 500 Index. The FinTech supports real-time payments across the globe, processing instant transactions in 24 countries, including the United States, India, China, Australia and the U.K.
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