As the popularity of online shopping continues to rise, it comes as no surprise that there has also been an uptick in card-not-present purchases.
Worldwide, eCommerce card payments generated $2.7 trillion in 2015, representing a 26 percent growth rate that year. According to the Retail Banking Research (RBR) firm’s Global Payments Cards and Data Forecasts to 2021 research, this number is expected to double internationally to reach $6 trillion by 2021.
The study outlines several contributing factors driving this surge in eCommerce transaction popularity, including the rise in consumer confidence in online security measures. Chris Herbert, an RBR senior associate, commented on the increase in eCommerce shopping and spending.
“The eCommerce sector will represent a growing proportion of global card expenditure with one dollar in five spent online by 2021,” said Herbert. “The improving convenience and security of the eCommerce channel are key drivers of this growth.”
One country seeing continued growth in eCommerce is the United Kingdom.
A recent report from the U.K. Cards Association (UKCA) found that cashless purchases made through debit and credit cards more than doubled in the past decade. In 2006, 6.7 billion purchases were made by credit and debit cards. In 2016, U.K. shoppers brought the number up to 16.4 billion.
A combination of online spending and contactless payments are helping to drive these U.K. card-not-present transactions numbers. The UKCA data show that 39 percent of card purchases were completed through these two methods in 2016, compared with a 24 percent rate the year before.
The mobile app payment method is seeing some of the more aggressive growth, with Barclaycard research showing a 90 percent rise in the use of its Android app through 2017. It also appears that a majority of contactless and mobile payments will be driven by the younger shopping demographic.
Is this the beginning of the end in using cash for purchases worldwide?
Research from both RBR and Payments UK seem to indicate that the end of cash may occur in the next few years. The decline of cash payments has slowly become a major concern, with studies like these showing a rise in cashless and mobile as the preferred consumer payment options.