Mobile payment will surpass credit cards to become the most preferred way to pay for e-commerce by 2019, United Nations Conference on Trade and Development (UNCTAD) said in a report.
Credit and debit cards accounted for nearly 51% of all e-commerce payments in value terms in 2014. However, their share is expected to drop to 46% by 2019 as e-wallets and other alternative payment methods rise in importance.
Digital payments are dominated by credit and debit cards in developed regions, followed by e-wallets. However, in developing nations credit cards are rarely preferred as new online and mobile payment methods are growing in popularity, the report noted.
In places like Egypt, around 90% e-commerce transactions are paid by cash-on- delivery, and in LDCs the reliance on cash is even more pronounced.
The report noted that in China, the preferred payment method for business to consumer (B2C) e-commerce is Alipay, which used by 68% of all online shoppers in the country. While in Kenya, mobile money is more commonly used than credit cards for e-commerce, although cash on delivery remains the main method.
E-wallets emerged as the most popular method of payment for cross-border transactions.
Distributed ledger technologies such as blockchain may increasingly be used for cross- border payments in the future.
“This technology can make online payments safe, and being peer-to-peer, it is less expensive than intermediated payment platforms,” the report stated.