A new study from Juniper Research has found that transaction values for physical goods sales online will grow from $3.3 trillion in 2020 to $4.4 trillion by 2025, with this 33% growth hastened by the COVID-19 pandemic.
The pandemic has fundamentally altered customer behaviours towards eCommerce, with these behaviours likely to be sustained in the longer term. Further growth in global online purchase values will be driven by the increased availability of eCommerce in emerging markets over the next five years.
Growth in Emerging Markets Highlights Necessity of Cross-border Payment Enablement
The new research, eCommerce Payments: Emerging Trends, Opportunities & Market Forecasts 2020-2025, predicts that emerging markets will be significant drivers of growth, with the Indian Subcontinent and Latin America expected to experience a rapid acceleration of physical goods transaction values between 2020 and 2025; seeing the growth of 116% and 82% respectively. This expansion highlights the necessity for stakeholders to address pain points around cross-border payments, including varying local payment regulations and differing consumer payment preferences.
Research author Susannah Hampton said:
“It is critical for merchants and payment providers to address local regulatory requirements and enable preferred consumer payment methods across all regions, or they will fail to capitalise on the highest growing eCommerce markets.”
OEM Pay to See Volume Growth; Boosted by Rising User Awareness
OEM Pay, where payments are made by a smartphone manufacturer-backed wallet, such as Apple Pay & Google Pay, will see a surge in use, with purchase volumes for remote goods anticipated to grow by 730% globally between 2020 and 2025. OEM Pay is seeing increasing consumer awareness; driven by its use in the contactless arena.
The research predicts that OEM Pay will increasingly disrupt established eCommerce payment methods by offering frictionless payments, but also found that current acceptance of OEM Pay across different merchants is highly varied. The research recommends that payment providers focus on maximising OEM Pay integration to ensure seamless user checkout processes.