15 Online Payment Statistics You Don’t Need to Pay For
Updated · Dec 21, 2022
Don’t you find coins so annoying?
They’re heavy, and they jingle, and there’s no possible way for you to keep them organized in your wallet.
It’s no wonder the world is moving towards cashless transactions, really—especially since online shopping took off along with the COVID pandemic.
Let’s put it this way:
Nearly three billion people currently use electronic wallets, and another two billion are likely to join them over the next couple of years.
In other words, digital transactions are the future, and this list of online payment statistics will shed light on many crucial aspects of the industry.
Payment Method Statistics You Can Bank On (Editor’s Choice):
- In the US, only 30% of people use e-wallets.
- E-wallet payments constitute just 10% of POS payments in the US but over three times that globally and five times that in China.
- In 2020, e-wallets made up 44.5% of transaction volume.
- But they will facilitate about 51% of payments by 2024.
- The global digital payment market is set to reach $12.55 trillion by 2027.
- PayPal commands a 42.9% share of the payment processing software market.
- The Far East region controls 93% of the QR payment market.
- Alipay is the leading mobile payment app, boasting 1.67 billion users.
- Online payment fraud costs businesses around the world a collective $20 billion.
The Most Popular Payment Options for Online Shoppers
Being an online shopper has never been easier—if for nothing else, then at least for the wide range of payment options available at most e-stores.
While cash on delivery (COD) is still a thing, the overwhelming majority are a tad more contemporary when it comes to paying.
Let’s see what the most popular payment options are.
1. PayPal commands a 42.9% market share.
There’s a wide variety of payment methods for online shopping, but one of them is clearly far more popular than any other.
As of September 2022, PayPal commands a 42.9% share of the payment processing software market. That’s twice as large as the second-biggest platform on the list, Stripe, which controls 18.8% of the market.
Shopify’s own payment processing technology ranks third (12.7%), leaving Amazon Pay at fourth (4.9%)—nearly ten times behind PayPal’s market share.
Dozens of smaller payment providers—such as Afterpay, Klarna, and Sezzle—take the remaining 20% or so, most of them taking a 1% share (or less).
Fun fact: Stripe is one of the most valuable private startups. Specifically, it’s #3 on the list, reaching a valuation of $94+ billion. Bytedance ($140 billion) and SpaceX ($100 billion) take the top two spots.
2. Alipay is the leading mobile payment app worldwide.
PayPal may reign supreme overall, but if we focus exclusively on the mobile app world, the situation changes.
Payment method statistics indicate that Alipay boasts more users than the next two platforms combined. The Chinese tech giant recorded 1.67 billion users in 2021, while its main Western rivals—Apple Pay and Google Pay—only reached 808 million and 757 million users, respectively.
PayPal (458 million users), Amazon Pay (83 million), and Samsung Pay (132 million) follow behind in the mobile scene.
3. E-wallets made up 44.5% of transaction volumes in 2020.
Online transactions come in many shapes and forms, but in recent years we’ve observed a certain consolidation of payment methods into so-called e-wallets.
These can be mobile—that is, wallets exclusive to a single mobile OS, like Apple Pay, Google Pay, Samsung Pay, etc.—or digital (like Alipay, WeChat Pay, Amazon Pay, and Paytm).
In 2020, e-wallets accounted for nearly half of the total ecommerce transaction volume worldwide, which represents a 6.5% increase from 2019.
Other popular payment methods were credit cards (in 22.8% of transactions), debit cards (12.3%), bank transfers (7.7%), and COD (3.3%).
Fun fact: It seems the ultra-rich don’t shy away from making handsome payments through apps. In 2020 alone, 54 e-wallets recorded more than $1 billion in transactions.
4. Online payment fraud caused losses of $20 billion in 2021.
2020 was the first and arguably the hardest year of the pandemic. Not only were there strict lockdowns—which led to an enormous increase in ecommerce transactions—but it was also a time of great opportunity for malefactors.
Roughly 75% of online merchants say they had to deal with far more fraud attempts than usual. Total fraud-related losses that year reached $17.5 billion.
Worse yet, this trend continued in 2021. Losses went up another 14%, hitting $20 billion. Considering ecommerce is likely to keep growing, it’s likely these figures will go up again once 2022 is over.
Facts about The Payment Industry in the US
Despite being the world’s foremost economy, the US does not lead the pack when it comes to the adoption of innovative payment solutions.
As you’ll see in the following stats, e-wallets remain relatively uncommon—even among the youth.
5. Only 30% of people use e-wallets.
Despite being the second-largest online market in the world (after China), ecommerce in the US doesn’t rely much on novel payment methods.
Here’s about as stark an example as we could come up with: 72% of online shopping transactions in China happen through e-wallets compared to only 30% in the US.
This discrepancy is even more bizarre because 96% of US citizens have access to the internet, yet just 59% of the Chinese do.
Nevertheless, online payment statistics from 2020 reveal that US consumers lean towards credit or debit card transactions (30% and 21%, respectively). On the other hand, bank transfers are only for 6% of consumers.
6. Nearly half of the people aged 18-54 use e-wallets.
In 2020, 46% of those aged 24-39 reported using an e-wallet. Curiously, younger adults (18-23 years old) are slightly less likely to use one—they have a 44% adoption rate, the same as the 40–54 age bracket.
Furthermore, digital payment statistics suggest that only 22% of baby boomers and even fewer members of the Silent Generation (8%) use an e-wallet.
Fun fact: There’s still quite a bit of reticence in the US about all things digital—or, more accurately, about things that are all-digital. For instance, 30% of the population claims they wouldn’t trust a bank with no physical branch.
7. Less than half of US consumers used proximity mobile payments at least once in 2021.
A “proximity mobile payment” happens when you hold your phone close to a POS terminal and make a transaction through Near Field Communication (NFC) technology or by scanning a QR code.
In terms of the penetration rate of this mode of payment, China is the undisputed leader —87.3% of Chinese smartphone users have made proximity mobile payments in the last year.
South Korea and the US follow behind, at 45.3% and 43.2%, respectively. For comparison, the penetration rates of QR payments in European countries tend to be lower than 20%.
Fun fact: E-wallet payments constitute just 10% of POS payments in the US and 50% of those in China. The global average falls somewhere in between, with 33.1% of POS transactions involving e-wallets.
8. 51% of merchants believe accepting e-wallets leads to customer loyalty.
In a world where consumers demand simple and fluid online and offline experiences, merchants can’t afford to ignore the latest trends in the payments industry.
A survey looking into the benefits of accepting e-wallets shows that 51% of merchants found this to increase repeat business, and an additional 61% noticed checkout speeds rose.
As if that wasn’t enticing enough, fraud and chargebacks also went down in 37% and 26% of cases, respectively.
Fun fact: A quick and smooth checkout process reduces cart abandonment rates. Statistically, 17% of shoppers admit to not going through with a purchase when checkout forms are “too complicated” (read: long).
9. Friendly fraud causes nearly 30% of losses.
Although new payment technology is being developed constantly, the reality is that no matter how good its security features are, there will always be a way to overcome them. One rudimentary but very effective way of doing so is known as “friendly fraud.”
Why is it friendly?
Because it’s the customers who do it. They buy goods online and then issue a chargeback with their bank. Nearly 40% of online merchants report being victims of such a scheme. Moreover, friendly fire causes roughly 30% of online payment losses in the US.
Fun fact: Chargeback fraud costs businesses around the world a combined $40 billion a year.
The Latest Payment Industry Trends
The payment industry has become more dynamic than ever, with myriad cashless alternatives replacing traditional means of doing business.
Admittedly, most of them are simply a natural evolution of the existing system, but all-new phenomena, such as cryptocurrencies, are quickly gaining ground.
10. 37% of merchants intend to invest in payment processing in 2022.
The payment industry is moving quickly in the direction of cashlessness, thus ushering in a wave of digital payment trends that people who dabble in ecommerce have little choice but to ride.
Payment processing is the fourth most important field for investments for the average business and the second for multinational corporations. Not only can a good processing system make transactions easier for sellers and buyers, but it can also allow for better business insights through shrewd usage of analytics tools.
Understandably, 37% of merchants intend to invest in new payment processing technology at some point in 2022.
11. The #1 customer request for Airbnb is to accept crypto payments.
Although many deem it to be the most secure payment method out there, cryptocurrencies haven't had a particularly good year in 2022.
Still, the era when only a dedicated few dabbled in crypto is long gone. Nowadays, for instance, at least 16% of the US population has used, bought, or sold cryptocurrencies. Furthermore, 73% of companies believe that adopting blockchain is necessary to maintain a competitive edge.
So, it’s not surprising that Airbnb customers want to pay for their accommodation using crypto. Just like it’s not surprising that the company is considering the request seriously.
We at Web Tribunal already observed a rise in demand for crypto tax software.
12. The Far East region controls 93% of the QR payment market.
QR codes are a more recent mobile payment trend. Essentially, they present a way of carrying out transactions that bypass much of the traditional infrastructure, making the whole process simpler and cheaper for both sides.
The global market for QR payments is currently worth $2.3 trillion, but roughly 93% of that is generated in China and the Far East. In other words, the region accounts for $2.16 trillion.
Mobile payment usage statistics suggest that by 2025, the rest of the world will claim a 13% share out of the total $2.7 trillion worth of transactions.
In the West, QR payments will be ten times more popular in North America than in Europe—$27.2 billion vs. $2.2 billion in total transaction volume, respectively.
13. The global digital payment market is worth $6.75 trillion.
(Source: Yahoo! Finance)
Digital payments were already gaining ground quite quickly pre-pandemic, but they’ve become the dominant payment method in much of the world post-COVID.
The market is now growing at a CAGR of 10.9% and will likely reach $12.55 trillion by 2027.
Much of this growth is likely to happen in the APAC region, where digital payments are already the norm, though the Western world is also becoming increasingly cashless.
Fun fact: On average, South and Southeast Asia consumers currently use 2.74 mobile wallets per person.
14. E-wallets will likely facilitate 51.7% of ecommerce transaction volume by 2024.
People’s preferred payment methods in ecommerce are unlikely to see dramatic changes anytime soon. The only real trend to note is that e-wallets are steadily gaining more popularity while all other options are seeing ever-so-slightly less use.
By 2024, e-wallets are expected to own more than half of the market. On the other hand, credit and debit cards will go down by 2% and 0.3%, respectively, taking a combined 32.8% share of transactions.
15. By 2025, the global population will have 4.8 billion mobile wallets.
One of the best payment methods at present is the e-wallet. By the end of 2020, there were an estimated 2.8 billion mobile wallets worldwide, nearly half of which (1.34 billion) were concentrated in the Far East.
But there is certainly much room for growth.
By 2025, the Southeast Asian market is set to expand by a mind-blowing 311%. Other regions—like Latin America, Africa, and the Middle East—are likely to experience growth of 150% or so, too. The exceptions are Western Europe and North America, where new users will be relatively few.
All in all, there will be 4.8 billion mobile wallets by 2025—which means this will be the world’s preferred payment method.
The day is not far when an e-wallet will finally be as common as a physical one. Perhaps the former may even beat the latter a few years from now.
Granted, we don’t know when exactly that day will be.
But a good look at some key online payment statistics can give you critical insight into the importance of adopting alternative payment methods in your business.
A wayfarer by heart, Jordan fancies journeying into foreign lands with a camera in hand almost as much as he enjoys roving the online world. He spends his time poking at letters and pixels, trying to transmogrify them into something cool.