The online payment industry is beginning to shift. Credit cards remain the dominant online payment form in the United States but that will soon change. German firm yStats predicts that by 2017 alternative payment methods will be used for more than half of all B2C online transactions. The firm predicts that digital wallets and mobile payments will grow the fastest in not only the United States but also on an international scale. Additionally, alternative payments are becoming the preferred payment form online in various industries.
The data from yStats reflects that in regard to online transactions credit cards were used 75% of the time after which the second highest method of payment were digital wallets. The firms’ report also concludes that digital currencies, such as bitcoin, will continue to increase in the next years sending alternative payment numbers even higher in the United States.
In regard to Europe the market share also stands to increase. In fact the company predicts the alternative payments market share, including forms such as mobile and e-wallets, to grow to as much as 20% of the total payments market by 2020. In countries such as the Netherlands and Germany however, alternative payments already account for a large portion of transactions.
In other markets, such as Latin America, alternative payment methods have exploded and already account for over half of the total online transactions.
The Asia-Pacific market shows that it has a stronger digital wallet presence than other places in the world with heavy card use online.
The high risk merchant industry stands to benefit from this increase in online sales and use of alternative payment methods. Because high risk merchant accounts are more susceptible to fraud new alternative payment methods could prove to secure transactions more. Also, high risk merchant accounts usually have difficulty accepting online payments because processors are unwilling to accept certain industry risks. By incorporating new alternative payment methods high risk merchant accounts can more easily facilitate payments online.