Buy Now Pay Later to Become Fastest Growing Online Payment Method in India: Report
The 2021 Global Payments Report by Worldpay from FIS shows that BNPL is the fastest growing e-commerce online payment method in India, projected to grab a sweet 9 per cent of the total market share by 2024
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There is empirical data to show that the pandemic year has accelerated the growth of the digital payments industry. Of the many digital payment methods used for e-commerce transactions, a relatively new entrant Buy Now Pay Later (BNPL) seems to be gaining steam, shows a report.
The 2021 Global Payments Report by Worldpay from FIS, a US-based financial services technology company, shows that BNPL is the fastest growing e-commerce online payment method in India, projected to grab a sweet 9 per cent of the total market share by 2024. Currently, the method holds 3 per cent share and is expected to grow at 53 per cent compounded annual growth rate (CAGR). BNPL services are post-purchase payments allowing consumers to make payments in interest-free installments or pay off the invoice after a determined period.
Digital wallets hold the largest market share of 37 per cent as of 2020, followed by credit cards at 17 per cent and debit cards at 15 per cent, as per the report that attempts to examine current and future payments trends across 41 countries.
Graphic 1. Graphic: 2021 Global Payments Report by Wordplay form FIS
Options of prepaid cards and cash on delivery are quickly declining, expected to account for less than 3 per cent by 2024 compared with the current 9 per cent.
As for in-store payments, the most popular method right now is cash at 34 per cent market share, followed by digital wallets and debit cards at 22 per cent and 20 per cent, respectively. However, the trend is expected to reverse over the next few years as digital wallets will overtake cash as the most popular in-store payment method by 2024. While cash is expected to decline at 3 per cent CAGR to make up 21 per cent of the total POS transactions, digital wallets will increase by 11 percentage points to make up 33 per cent of the total transactions.
In fact, share of cash at point-of-sale (POS) has drastically fallen over the last one year, halving from 70.6 per cent in 2019 to 34.5 per cent in 2020, as per the report.
"eCommerce capability is no longer limited to just traditional websites, and physical retail has blended with the digital world. The shop floor is now in the palm of our hands and consumers expect the same hassle free and convenient shopping experience whether they are purchasing in app, through their social feeds or in the real world," said Phil Pomford, Managing Director of Asia Pacific, Worldpay from FIS. "
"Those (merchants) who position themselves with digital payments capabilities will be well-positioned to capture the next wave of growth in the retail and eCommerce market in India.
Interestingly, the report shows that across the APAC region, local wallet brands of each country are preferred payment options at POS compared to global tech giants like Amazon Pay and Paypal. In India, Google Pay is the most widely used wallet with 43 per cent share, followed by Paytm used by 36 per cent users.
The research methodology of the report includes collecting data using consumer surveys, B2B surveys and surveying 46,000 consumers globally in February and March 2020.