Trends Like Open Banking and BNPL Will Support E-Commerce Uptrend, Report Says – Digital Transactions
Open banks, one-click payment wallets, and the buy-now-pay-later trend will all help increase e-commerce volume globally over the next five years, Juniper Research predicts in a report released on Monday. This momentum is likely to push online sales long after the short-term momentum from the pandemic subsides, Juniper says.
E-commerce volume totaled $4.9 trillion globally in 2021, a figure the UK-based research firm expects to reach $7.5 trillion in 2026, when China controls a share by 37%. Greater availability of multiple e-commerce channels, including mobile devices, will propel overall growth around the world, Juniper said. But alongside the boom in e-commerce will come a corresponding growth in fraud via identity theft, account takeovers and fraudulent chargebacks, the report warns. China, for example, will account for more than 40% of global fraud losses in 2025, or more than $12 billion, according to Juniper forecasts.
Open banking is a trend whereby fintechs can check consumer account balances and transfer funds to pay for online purchases. As standards bodies work to promulgate standards for this activity, e-commerce payment providers “should…partner with specialists in…specific emerging payment areas to keep pace with evolving merchant expectations regarding types of acceptance,” the research firm says in its statement, referring to digital and crypto wallets as well as open banking.
Open banking has gained greater visibility in the global payments market thanks to the efforts of the two global card networks to acquire companies specializing in this field. visa inc. acquired Tink AB, while Mastercard Inc. bought Aiia and Finicity Corp.
Physical goods will continue to dominate e-commerce spending, the report says, accounting for 82% of payments value by 2026. To tap into the trend, advises Juniper, payments providers should support purchase plans immediate, subsequent payment, which allow consumers to separate. purchases in four equal installments paid over a six-week interest-free period. BNPL is becoming increasingly controversial, as the Consumer Financial Protection Bureau launched an investigation into the option and reports are emerging that consumers with multiple accounts are more likely to miss a payment.
Although still a big trend, e-commerce sales in the US market declined significantly last year as the pandemic effect lost some of its force. Sales in the third quarter of 2021 reached $214.6 billion, up 6.6% year over year, according to the Census Bureau, which tracks retail sales. This follows an 8.9% rise in the second quarter and three consecutive quarters with increases of 32% or more. Fourth quarter 2021 results are not yet available.