The global payments landscape has significantly evolved over the past decade. The rapid rise and equally rapid evolution of online and mobile commerce has given rise to a wave of new payment methods. E-wallets, in-app purchasing, and peer-to-peer payments are all products of consumers’ increasing comfort with digital commerce. In many developed markets, older payment methods, such as checks and payment on delivery, are being replaced by alternatives that make online and mobile transactions frictionless, thus further feeding consumer appetites for online shopping.
By 2020, the digital portion of global retail sales is on pace to double from $1.9 trillion to $4 trillion, according to eMarketer. That’s not counting online sales of travel and tickets!
With the growth of international ecommerce platforms like Shopify and Magento and payment platforms like PayPal and Stripe, the barriers to ecommerce are crumbling, giving life to new businesses, opening up new revenue streams for established players, facilitating economic trade, and driving technology advancements worldwide. As ecommerce continues to become increasingly global, fueled by growth of internet coverage around the world and higher levels of smartphone penetration, the forms consumers use to pay for their digital and physical goods will continue to evolve as well.
Major technology companies, such as Facebook, Google, Apple and Microsoft, which are engaging in cross-border business and providing global services, are tasked with deploying their services on top of old and fragmented payment infrastructures. This is particularly challenging in emerging markets, because each country has its own legal framework, issuers, acquirers, processors, and gateways, resulting in payment methods that may appear to be very similar on the surface but are very different under the hood. In addition, consumers in emerging markets are still relying on alternative payment methods like bank transfers, installments, and voucher-based…