{"id":108437,"date":"2021-03-02T18:04:47","date_gmt":"2021-03-02T18:04:47","guid":{"rendered":"https:\/\/fin2me.com\/?p=108437"},"modified":"2021-03-02T18:04:47","modified_gmt":"2021-03-02T18:04:47","slug":"buy-now-pay-later-to-outstrip-card-payments-by-2024-expert-forecasts","status":"publish","type":"post","link":"https:\/\/fin2me.com\/business\/buy-now-pay-later-to-outstrip-card-payments-by-2024-expert-forecasts\/","title":{"rendered":"Buy now pay later to outstrip card payments by 2024, expert forecasts"},"content":{"rendered":"
The use of buy now pay later payment grew 10 per cent in New Zealand last year and its use could outstrip card payments for e-commerce by 2024, a global payments expert has<\/span> forecast.<\/span><\/p>\n Phil Pomford, general manager for global eCommerce, APAC, at FIS, said the global payments landscape was changing dramatically and Covid-19 had accelerated many trends that were already kicking off.<\/p>\n He said e-commerce grew at the fastest rate in the last five years in 2020.<\/p>\n “With shops being closed in different places and at different times e-commerce has really become a place for consumers to go to to get some of basic items, but also broader consumer items.”<\/p>\n It had forecast 19 per cent growth in e-commerce in 2020 but now it expected that figure to be slightly higher.<\/p>\n “Obviously, we didn’t predict what was coming down the pipe in terms of a global pandemic but it certainly shows what Covid has done is really pushed things along.”<\/p>\n And he said it was not going away any time soon with it forecasting annual growth of 12 per cent from here on in to 2024.<\/p>\n Pomford said in New Zealand buy now pay later – where consumers spread their payments over a number of weeks but get the item upfront – had got a stranglehold and it was going to continue to grow.<\/p>\n “We expect it to grow and potentially overtake cards by 2024.”<\/p>\n The explosion of buy now pay later was projected to see e-commerce credit card transactions fall from 37.6 per cent in 2019 to 22.8 per cent in 2024.<\/p>\n E-commerce as a whole was projected to grow from $5 billion to $7 billion in 2024 – an increase of 40 per cent while sales via mobile phones were projected to grow to 61 per cent of all e-commerce transactions by 2024, up from 47 per cent.<\/p>\n “One of the big trends is around growing mobile spend – expect mobile to be almost 50 per cent of spend.”<\/p>\n Pomford said for retailers that mean they needed to ensure consumers had a seamless experience by having mobile-optimised web pages and an easy online check-out process.<\/p>\n “Consumers today are looking for frictionless, they are looking for speed, looking for simple ways of using biometrics to check out. Merchants who can help consumers make very simple transitions … will do extremely well and that really does link to omni-channel commerce.”<\/p>\n He said consumers wanted to be able to buy it online and return it in store.<\/p>\n “Things like that I think merchants in New Zealand really do need to think about that as they look forward.”<\/p>\n When it comes to in-store payment trends credit cards remain the most popular accounting for almost 37 per cent of transactions in 2020.<\/p>\n But digital wallets, the likes of Applepay and Androidpay, were the fastest-growing payments method with predictions that it will grow 25 per cent a year for the next four years.<\/p>\n The one thing that isn’t changing much in New Zealand is cash. It makes up just under 13per cent of point-of-sale transactions and is expected to fall only 0.7 per cent in the next five years.<\/p>\n That contrasts to Australia where cash payments made up around 8.3 per cent last year and are forecast to fall to 2 per cent by 2024 making Australia a virtually cashless society.<\/p>\n “The move towards cashless is slower in New Zealand. I think New Zealand has bucked the trend around cashless and we expect the levels of cash to remain similar between now and 2024 based on our predictions.<\/p>\n “I think New Zealand’s very early and rapid response to Covid – targeted lockdowns like what we are seeing at the moment – has meant shops have been closed less than other places so I think that is why cash has continued to remain higher than the average.”<\/p>\n Pomford said globally cash use had dropped10 per cent in the last year which was quite significant.<\/p>\n “Cash has been seen as unhygienic and there were early reports around cash being a transmitter.”<\/p>\n But he warned that the drop in cash use could have consequences for financial inclusion and groups like charities and those who were paid in tips.<\/p>\n