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WE DELIVER THE FACTS YOU MAKE THE DECISIONS
RESEARCH ON INTERNATIONAL MARKETS
Press Release
Hamburg, May 21st, 2014

Credit cards maintain their lead in global online payments, with
alternatives encroaching.
Hamburg-based secondary research organization yStats.com has released a new report: Global
Online Payment Methods: First Half 2014, which reveals that credit cards continue to have the
largest share of global B2C E-Commerce payments and are likely to maintain that lead in the near
future. However, the fastest growing alternative methods, digital wallets and mobile payments are
increasing their share rapidly, with an annual growth rate of over 40% outpacing other payment
methods. Put together, alternative payment methods are forecasted to increase their share of
online payments to over 50% by 2017.

Security remains a major issue on the global online payments market. Surveys show that more than a third of
Internet users globally who do not shop online cite distrust to online payments as their reason for not
making purchases, though this consumer concern varies greatly by country and region.

Moreover, an important trend is integration of payments across various channels. Banks, payment processers,
card companies and multi-channel merchants globally are working toward integration of online payments
with mobile and POS payment, while mobile wallets start to offer services beyond mobile payments, and
merchants increasingly opt for a single payment provider across channels.

Mobile payments, both online and in-store, are
predicted to continue strong growth worldwide,
with customer adoption improving. About a
quarter of the global consumers used their
mobile phones for financial or banking
transaction last year, and the number of
payments with mobile handsets is forecasted to
grow rapidly in the next few years to reach several
billions by 2018. The region leading worldwide by
share of mobile on total B2C E-Commerce
payments is the Middle East & Africa.

Competition on the global online and mobile
payments market is fierce, with major players
developing and employing innovations in recent
months. Amazon launched promotion of its Login
and Pay processing service for online merchants,
while Google launched a prepaid card connected
to Google Wallet and plans to expand its payment services further. Visa and MasterCard added a cloud-based
solution to its NFC payment offers, using the Host Card Emulation technology. PayPal, which generated almost
EUR 5 billion in revenues in 2013, launched a new branding campaign with focus on mobile. Moreover,
expansion into online and mobile payments is anticipated from large players Apple and Facebook.

In the USA, alternative payment methods are expanding to rival debit and credit cards in both online and
offline retail. A digital currency trend also continues to evolve. The online retail payment market in the USA
grew by a small double-digit share in 2013, reaching several hundreds of EUR billion. M-Commerce payments
amounted to a medium-high double-digit figure in EUR billion, split almost evenly between tablets and mobile
phones. In Canada, online payment by card continued to be the leading method.
In Latin America, the number of internet users and potential shoppers that do not have credit cards has led to
substantial presence of alternative payment methods. Only in Brazil does the percentage of the adult
population with a relationship with a bank surpass 80%. The online and mobile payment markets in Brazil
grow, spurred by regulation, widening penetration and deployment of new technologies. Boleto Bancario was
the second most used payment method in Brazil, after bank credit card. In Argentina last year the payment
method most used by over 50% online shoppers was credit card, while cash payments upon receipt and such
services as Pago Facil and Rapi Pago also popular. In Mexico, the largest share of B2C E-Commerce sales is
generated through credit card payment, while the other popular method is cash on delivery.


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Cards account for the largest share of B2C E-Commerce transactions in Europe, while digital wallets are in
second place. European Union legislators are working on improving the electronic payments regulations
considering such issues as security. In Germany, invoice remains the leading payment method in online
shopping, perceived as both the most secure and most convenient method. But other methods, such as
credit card and digital wallets, are on the rise. In Austria, the leading method both in M-Commerce and B2C E-
Commerce was credit card, while online shoppers in Switzerland most used invoice in online shopping and
credit card in mobile shopping.

Online payment is the largest contributor to card payment growth in the UK, with annual growth of over
10%. The use of contactless cards in on the rise: in early 2014, the monthly value of payments by
contactless cards in the UK exceeded a hundred GBP 100 million for the first time. In France, credit card
remains the most preferred payment method in B2C E-Commerce, followed by PayPal and similar services.
The year-on-year growth of online credit card payments in France slowed to a single-digit percentage in early
2014. Online card spending in Italy was growing year-on-year in every month of 2013, while in Spain, the two
payment methods most used in online shopping in 2013 were Bank Credit Card and PayPal.

Credit card was the most preferred payment method in both B2C E-Commerce and M-Commerce in Sweden,
though the share of online shoppers that prefer credit card decreased between 2012 and 2013. Card use
dominated payments in Denmark and Norway also in both B2C E-Commerce and M-Commerce, while in
Finland online bank transfer was ahead of cards.

Cash on delivery remains the dominant payment method in online shopping in Russia, though use of credit
cards and alternative payment is on the rise there. More than half of online shoppers prefer to pay on delivery
with cash, but a growing number now reaching nearly a quarter of shoppers prefers to pay with card either
online or upon delivery. Cash on delivery is also the most use method of payment in the Czech Republic.
Online shoppers in Turkey predominately use a credit card for purchases. E-Commerce transaction with cards
in Turkey reached a value of over EUR 10 billion. Also in Estonia B2C E-Commerce transactions with bank
cards are significant, with cross-border transactions by far outweighing the domestic ones.


yStats.com GmbH & Co. KG Behringstrasse 28a D-22765 Hamburg Phone +49 (0) 40 39 90 68 50 Fax +49 (0) 40 39 90 68 51
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WE DELIVER THE FACTS YOU MAKE THE DECISIONS
RESEARCH ON INTERNATIONAL MARKETS




Digital wallets had a substantial share on total B2C E-Commerce payments in the Asia-Pacific region, though
still behind credit and debit card. Security and Convenience of the Payment Method were among the top
decision factors in B2C E-Commerce for online shoppers in the region.

In Japan, payments in B2C E-Commerce are dominated by prepayment with a credit card, followed by cash or
card payments upon delivery in distant second. Over the counter payments for online purchases also are
popular. Though NFC payments arrived in Japan in 2013, contactless payment with cards is likely to continue
dominating this market segment. In South Korea, credit card payments are most common in E-Commerce,
while regulations are strict about security of such payments. In distant second, the payment method following
card payments was money transfer.

Mobile payments had a boom last year in China, with gross merchandise volume of third-party mobile payment
growing by around 7-8 times, sparked by mobile shopping. Still more growth is expected as competition
intensifies. The number of online payment users in China topped a quarter of a billion, while value of
payments increased by half. Alipay accounted for the largest share of the online payments market in China in
2013, while Tenpay was in second place. Alipay was also the largest player on the Chinese third-party
payment market, with its dominance even more evident than in online payments.

In other areas of Asia, the share of cash on delivery on B2C E-Commerce payments in India is forecasted to
decrease from 2013 to 2016, though still account for around a half of the market as credit card and mobile
payment increase there. In Indonesia, bank transfer was the most preferred payment method in B2C E-
Commerce last year, followed by cash on delivery.

Cash on delivery remains the major payment method in the growing B2C E-Commerce in the Middle East and
Africa. This method accounted for almost a half of E-Commerce transactions, while cards accounted for a third.
As of 2013, credit card was the online payment method most used in B2C E-Commerce in South Africa,
followed by bank transfer. The regions leader in mobile payments, Kenya, generated a small double-digit
number in EUR billion of mobile payments in 2013.


For further information, see:
http://ystats.com/en/reports/preview.php?reportId=1081


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About yStats.com
yStats.com has been committed to researching up-to-date, objective and demand-based data on markets and
competitors for top managers from various industries since 2005. Headquartered in Hamburg, Germany, the
firm has a strong international focus and is specialized in secondary market research. In addition to offering
reports on markets and competitors, yStats.com also carries out client-specific research. Clients include leading
global enterprises from various industries including B2C E-Commerce, electronic payment systems, mail order
and direct marketing, logistics, as well as banking and consulting.