Emerging Markets Experience Stellar Growth

A new report from Juniper Research has found that the annual transaction value of online, mobile and contactless payments will reach $4.7 trillion by 2019, up from just over $2.5 trillion this year.

The report – Digital Payment Strategies: Online, Mobile & Contactless 2014-2019– observed that the largest net increase in spend would occur through remote physical goods purchases. It highlighted the dramatic surge in activity in emerging markets such as China, with the online retailer Alibaba accounting for 20% of global B2C (business to consumer) and C2C (consumer to consumer) eRetail worldwide in 2013.

However, it observed that while there was organic growth in the overall transaction levels due to increased purchasing on tablets and mobile, a significant proportion of tablet usage represented migration from desktop activity. It pointed out that combined transactions on mobile handsets and tablets would exceed those on desktops and laptops for the first time this year.

The report also noted that there was accelerating migration from physical format (DVD, CD) to digital (stream, download) across all core content sectors. These included a marked trend towards VOD (Video On Demand) from players such as Lovefilm and Netflix at the expense of DVD, with online VOD services in commercial deployment in most European markets.

Contactless Payments “Boosted by HCE”

Meanwhile, the report says that contactless activity will primarily be driven by card purchases rather than mobile, although it argued that mobile transactions should be boosted by HCE (Host Card Emulation)-based NFC (Near Field Communications) services.

According to report author Dr Windsor Holden, “While we are now seeing contactless transactions scaling up in markets such as Australia, Poland and the UK, almost all current consumer usage is via the card. However, with banks increasingly attracted to an NFC model in which they have full control of the customer, then we may well see some high-profile deployments in the medium term.”

The whitepaper, Paying the Digital Way, is available to download from the Juniper Research website together with further details of the full report and the attendant Digital Payments Strategies Excel.