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  • 36 Key Online Payments Statistics: 2019 Market Share & Data Analysis

36 Key Online Payments Statistics: 2019 Market Share & Data Analysis

Category: B2B News

The sector for online payments is arguably one of the most dynamic markets in the financial industry. The industry has evolved so fast that the projection into its future is purely enthralling. Technology has driven change in the payment space, sweeping past cards, cheques, and cash, into a new era dominated by cryptocurrencies, e-wallets, and one-click online payments — at least for now.

Indeed, cash payments are becoming an option, impelled by tech innovations from both newcomers and dominant FinTech firms. The digital disruptions in the payment industry have led to the advent of numerous payment gateway software providers offering products that streamline online transactions.

Like most business processes, online payments are constantly changing, and companies must adjust to the latest development to remain competitive. To help you stay abreast of the industry, we have compiled the following online payment statistics and industry insights. Similarly, if you’re a vendor, having these online payment data at your fingertips will help you configure your system the better to match customer needs.

payment gateway

Statistics On The Rise Of Generation Z

The emergence of Generation Z represents a powerful spark of revolution in the online payment space. The oldest members of this cohort are just young adults or teens, and the group is projected to represent 40% of total US consumers by 2020. Labeled as “screen addicts,” or “view now, buy now consumers,” this group has taken over from the much-hyped Millennials, and it’s showing every sign that it is the future customer base for the online payment market.

Natively digital, Gen Z-ers are mobile mavens that crave immediacy and are socially dependent on Facebook, Instagram, Snapchat, Apple, Amazon, and Google. The generation gravitates to digital tools like payment, bill, and expense management applications, and generally, demand highly-relevant and personalized experience.

  • A third of Gen Z-ers want to share their online payments on social media, compared to only 3% of baby boomers. (Accenture)
  • 69% of Gen Z-ers use mobile banking apps daily or weekly, while only 17% of baby boomers are interested in using mobile banking apps. (Accenture)
  • Online payment statistics intimate that 82% of Generation Z consumers who own a smartphone shop online. (PayPal)
  • Also, studies have shown that while 33% of millennials use cash, but only 18% of Gen Z-ers use cash. (Digital Transactions)
  • Moreover,  58% of Generation Z have made an impulsive mobile purchase. (PayPal)
  • Studies have also found that when it comes to online shopping, 80% of Generation Z are influenced by social media (Retail Dive)

It’s vivid that the financial needs of Gen Z-ers are getting complex by the day, and industry players must up the ante to meet their desires. Businesses must rise to the occasion and elevate online payments by envisioning and actualizing innovations that meet the needs of these trendsetters. For example, the wall that exists between payments and social media needs to be broken down to pave the way for more intriguing online payments. Also, businesses should follow a well-defined guide on implementing payment gateway services to ensure consistency across all channels.

Gen Z p2p payment

Voice Commerce Statistics

When voice search first entered the commerce industry, it was met with a dizzying onslaught of skepticism. However, voice commerce has come of age, and the use of voice assistants in the industry is rapidly gaining popularity as more and more consumers buy smart devices such as Amazon Alexa, Siri, and Google Assistant to streamline online shopping.

  • Smart speakers don’t necessarily serve as primary sales channels as eMarketer notes. Smart speakers owners use them for different purposes including play music (97%), weather and news (94%), general questions (90%), reminder (87%), creating shopping lists (71%), make a purchase (62%), enabling smart home devices (57%), and email/calls (55%). (eMarketer report 2018)
  • A study by Transaction Network Services (TNS) found that 26% of consumers that own smart voice assistant devices have used them to make a payment. (Transaction Network Services)
  • Also, it’s noted that 34% of consumers in the United States have already purchased food using a voice assistant, while 35% say that given an opportunity, they would use voice assistants to buy food online. (Statista)
  • Online payment research has revealed that voice assistant technology is changing the shopping landscape. While the technology is still in its infancy, it’s hard to ignore its growing user base. According to OC&CS Strategy Consultants, 36% of US consumers make a purchase via voice assistants. (OC&CS Strategy Consultants)
  • Also, OC&CS Strategy Consultants reckons that Amazon dominates the voice shopping space accounting for approximately 90% of total spend. (OC&C Strategy Consultants)
  • Online payment data has shown that in 2022, 31% of consumers in the United States will have used a voice assistant to make payment. (BBVA)
  • One alarming statistic is that 74% of consumers state that they are not open to making payments through voice assistants because of security concerns. (Transaction Network Services)

How U.S. Consumers Used Voice-Enabled Speakers

Play music

%

Weather/news

%

General questions

%

Timer/alarm/reminder

%

Shopping lists

%

Make a purchase

%

Enabling a smart home device

%

Email/calls

%

Credit: eMarketer, 2018

Designed by

The number of consumers who use voice assistants to make payments is relatively small, but the user base is poised for speedy growth. The evolution of AI technology and the efforts being made by innovators to align voice shopping with the needs of modern consumers will make voice payment methods ubiquitous in a few years to come. You better be ready for the voice revolution an arm yourself with one of the best payment gateway solutions for your online and offline store.

P2P Mobile Payment Statistics

If you own a smartphone and have a bank account, then chances are you’ve most likely used or have heard about the peer-to-peer payment service. Mobile peer-to-peer (P2P) payment is one of the most intriguing and fastest-growing technologies in the financial space. This innovative technology is a force to reckon with when it comes to simplicity and convenience.

  • Online payment statistics by Accenture intimates that 68% of Gen Z-ers are delighted by instant P2P payments, more than any other demographic groups. (Accenture)
  • In the United States alone, the total transaction volume of Mobile peer-to-peer (P2P) payments will surpass $300 billion by 2021. (NASQAD)
  • By 2020, Zelle will have the biggest online payments market share at 56.1 million users, followed closely by Venmo at 38.7 million users. (eMarketer)
  • Zelle report that 80% of US consumers have used a P2P payment service, with 50% of new users being people aged 45 years or older. (Zelle)
  • By the end of 2020, 52.5% of US smartphone owners will have made more than one P2P transactions. (eMarketer)
  • According to online payment market share data by eMarketer, the number of mobile payment users will reach 150 million by 2020, and the total in-store mobile payment volume will reach $503 billion in the same year. ( Business Insider)
  • Being an early adopter of P2P payment services, China’s total volume of mobile P2P transactions is predicted to reach a monstrous $6.3 trillion by 2020, dominating a lion share of the global payment gateway market share. (Business Insider)

The incentive to securely and quickly transfer money without having to face the inconvenience of the tedious and complicated procedures has enabled P2P mobile service to cement its spot as the payment gateway of choice for today’s consumers. There is no doubt; P2P mobile payments have made it easy for consumers to send money anytime, anywhere, to whomever they want without worrying about restrictions over transaction amounts.

With P2P payment service, the tide is changing, and social networks are now offering payment services. Facebook, Instagram, and Snapchat are now enabling consumers to close sales within the social media environment, and this is a trend to keep an eye on. Also, going by the statistics, without implementing professional payment gateway tips for online stores, small businesses will miss the opportunity to tap into the power of P2P payments.

p2p payments

Omnichannel Payment Statistics

Decades ago, payment services were location-bound and pretty straightforward, with payments providers solely dictating the terms of accepting payments. Fast forward to today, things have changed, and the need to enable consumers to transact anywhere, anytime with ease, security, and speed has become integral to a business’ success. Technology has changed where and how payments are accepted, and the rise of omnichannel payments has reinvigorated the entire payment space, seamlessly fusing shopping experience across online and offline stores.

  • Putting some specific payment gateway market statistics to the omnichannel trends, 91% of consumers have plans to shop in-store, while 84% plan to shop online. Besides, 75% of consumers plan to shop both in stores and online. (PWC)
  • According to WorldPay, omnichannel shoppers spend up to 300% more than those shopping on a single channel. (WorldPay)
  • In addition, consumers think of shopping as a single, seamless experience, whether instore, on a mobile device, or online, and so must businesses. (WorldPay)

Where Global Consumers Bought Goods

Amazon

%

Physical store

%

Online store

%

eBay

%

Facebook

%

Instagram

%

Snapchat

%

Credit: BigCommerce, 2018

Designed by

Businesses can get more value by integrating all channels with online, social media, and mobile channels. It’s true that online, mobile, in-app, and in-store sales channels are powerful in their own right. However, many of the best payment solutions today can consolidate these channels to create an impeccable omnichannel pay platform that is at once flexible and secure.

Customer Experience (UX) Statistics

The changing financial needs of modern consumers and the advent of bold new technologies have put the race to innovate into overdrive. With payment being the most frequent touchpoint between the consumer and the business, customer experience has become the heartbeat and the principal competitive differentiator in payments revolution. For many consumers, payment experience equals customer experience, and they expect the process should be seamless regardless of when and how they choose to make payments.

  • 61 % of consumers are for the idea of openly accessing their finances so they can view credit card and bank account balances when making payments via a mobile app. (Accenture)
  • Most consumers, including 70% of Gen Z-ers and Millennials, have shown interest in digital payments consultancy and expense management services that enable them to better understand and control their spending. (Accenture)
  •  50% of Gen Z-ers and Millennials are willing to share their online bank account details with third-party service providers. (Accenture)

Today’s tech-savvy consumers demand a complete digital experience in their transactions. As a result, forward-thinking businesses must innovate to enhance customer experience and provide the flexibility and convenience demanded by modern consumers. With optimized customer experience, it will be easy for merchants to grow their online payment market size.

mobile app payment

Mobile Wallet Statistics

Let’s face it: mobile wallets are giving traditional payment providers, like banks, a run for their money as more and more consumers make their finances mobile. Mobile wallet is a growing trend, especially in the developed markets, where previously underbanked consumers are taking advantage of the estimable consumer-focused payment experience for its perks such as proactive balance alerts, immediate rewards, and streamlined payments and charges.

  • 23% of consumers in the US are willing to give up their digital banking app for a mobile wallet to consolidate all payment information in a single location. (Accenture)
  • 75% of consumers in the US use digital wallets because they’re more comfortable than carrying around credit cards.  (Finder)
  • Mobile wallets will play a huge role in the growth of the payment gateway market size. As Accenture predicts, in 2020, 64% of consumers will be using a mobile wallet, up from 46% in 2017. (Accenture)
  • It’s estimated that over 110 million adults in the US say they’ve swapped credit and cash for a mobile wallet at least once. (Finder)
  • At 28%, bank mobile wallets have a lower penetration rate, compared to the merchant’s wallets (39%) and Pays (Android Pay, Apple Pay, and Samsung Pay) at 49%. (Accenture)
  • The top reason for using a mobile wallet include convenience (74%), easy to track expenditure (25%), easy to carry (25%), and greater security (23%). (Finder)
  • More men (48%) have used a mobile wallet, compared to 41% of women. (Finder)

How U.S. Consumers Will Pay For Goods By 2022

Users by percentage (%)

Debit Card

eWallet

Credit Card

Cash

Charge Card

Credit: WorldPay

Designed by

Interestingly, even with the focus being mainly on the US markets, it’s hard to ignore the revolution of the Chinese mobile wallet markets, which is dominated by Alipay and WeChat Pay. According to Frost & Sullivan forecast, 950 million consumers in China will be using a mobile wallet by 2023. Besides, eMarketer predicts that 79.3% of Chinese smartphone users will be scanning, swiping, and tapping at the point of sale (POS) by 2021. This means that even as global small businesses explore legit payment gateway providers in the USA, they should not play blind to the events taking place in other markets such as China.

AI and Machine Learning Statistics

In the new era of fast-paced technological innovation, Artificial Intelligence (AI) and machine learning outline advanced analytical technologies with an outsized potential to overhaul the entire payment ecosystem for payment processors, banks, consumers, and merchants. AI has the potential to cut fraud, improve customer service, and reduce transaction times. While on the other hand, machine learning has already spread its wings in fraud management.

  • Machine learning can help payment providers increase revenue from their existing customer by up to 15% (McKinsey)
  • In addition, machine learning can help businesses reduce bad debt provision by up to 40%. (McKinsey)
  • According to a payment gateway research by Juniper Research, AI chatbots are predicted to help the financial sector achieve $8 billion in cost savings by 2022. (Juniper Research)

ai chatbots

What Does The Future Hold for Online Payments?

Numbers don’t lie, and it’s clear that the future of online payments is moving towards technological adoption. Currently, the industry has experienced tremendous improvements in terms of security, thanks to the implementation of biometrics, and payment transactions are now fast and frictionless. Payment gateway providers have embraced technological changes to provide an array of benefits craved by today’s consumers.

That said; one trend is conspicuous: online payment innovations are primarily centered around smartphones, AI, and machine learning.  As a result, merchants should come up with an overwhelming blend of virtual assistants, IoT, and smartphone apps to remain competitive in the already flooded e-commerce markets. The need to give a customer-centric experience refined by choice, flexibility, speed and convenience should also be a priority for any business that wants to meet the needs of modern consumers satisfactorily.

Above all, it’s good to note that the payment industry is continually changing, and keeping your eyes firmly fixed on the future will be a feather in your cap. For example, businesses should focus on emerging trends such as social payments, tabletop payment systems, and wearable payment devices, like Apple Watch and others, which have recorded a staggering 177% growth rate in recent years.

It won’t hurt, too, to learn more configuration techniques beyond drag-and-drop and plugin tools, the better you can optimize a payment gateway system, many of which have an open API for the taking. For that, you can take a look at this comprehensive guide on how to integrate a payment gateway in PHP, Java, and C#.

By Nestor Gilbert

Senior writer for FinancesOnline. If he is not writing about the booming SaaS and B2B industry, with special focus on developments in CRM and business intelligence software spaces, he is editing manuscripts for aspiring and veteran authors. He has compiled years of experience editing book titles and writing for popular marketing and technical publications.

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