Trends in the Global Migration to Digital Payments

  • By AFP Staff and Zanders
  • Published: 10/17/2022
Trends in the Global Migration to Digital Payments _Header (750 × 250 px)

The Covid-19 pandemic has clearly accelerated the global migration to digital payments. There is now unmistakable evidence of a gradual shift toward their adoption.

Regions: North America and Europe

Back in 1998, debit card payments exceeded personal cheques for the first time in the UK. Fast forward to the latest report from UK Finance* which highlights that debit cards were the most used payment method with 15.8 billion payments, accounting for almost 45% of all payments in the UK. The trend is similar across Europe. You can expect ‘new’ payment methods, such as digital wallets and QR codes, to grow in popularity globally in future years.

However, that is for the future and regional differences remain. In the USA, for example, 2021 data** confirmed that credit cards are still the most popular Point-of-Sale (PoS) payment method with a consistent 40% market share. Debits cards are in second place at 30%, according to Statista. North America generally mirrors the US. If we look purely at online sales in the US, the JP Morgan 2019 Global Payment Trends (Insights) report confirms that credit cards are still dominant, accounting for 47% of all e-commerce transactions in 2019. However, digital wallets have now moved into second place at 28%, according to JP Morgan’s report, confirming that US merchants are adapting to this new method quickly. Over half of those polled by the bank said they are likely to accept digital wallet payments within the next year, including popular digital wallet providers like PayPal, Google Pay and Apple Pay.

Regional differences: China

Moving to China, it is a completely different picture as they have become a mobile first nation already, where digital wallets and services dominate, not traditional credit or debit cards. In 2018, around 83% of all payments were made via mobile payment modes. The latest China statistics highlight that WeChat has the largest market share by penetration rate currently at 92.7% as of 2020.***

WeChat has 1.15 billion monthly active users as of September 2019, making WeChat Pay, the most popular payment method accepted by 72 million merchants in China and generating an estimated 1 billion+ transactions every day.

From a payment innovation adoption standpoint, China has taken a different approach. While many countries followed the more traditional phased path of cash to credit cards and now to smartphones, China didn’t. Its adoption of credit cards has been exceptionally low. While China has the largest card network in the world with 7.6 billion cards, according to the People’s Bank of China (PBoC), only 686 million are credit cards, as of 2019. This is linked to a combination of protectionism by the Chinese Government, which prevents Visa, MasterCard, or American Express operating in China, in addition to local resistance around both the use of card-based terminals and the associated transaction-based fees.

Global picture: Digital wallets and BNPL on the rise

When focusing on e-commerce on the global scale, the trends are now becoming much clearer. The Global Payments Report 2021 by Worldpay, shows that digital wallets remain the payment method of choice among e-commerce consumers worldwide, accounting for 44.5% of e-commerce transaction volume in 2020. Furthermore, the report also forecasts this will grow to 51.7% of e-commerce payment volumes by 2024, with credit cards and debit cards both showing declines.

In addition to the rise of digital wallet providers, such as Apple or Google Pay, WeChat and so on, the Global Payments Report 2021 report also notes the continued adoption of the Buy Now Pay Later (BNPL) option from the likes of Klarna, Zip in Australia or Sezzle in the US, with market share for BNPL expected to double from 2.1% in 2020 to 4.2% by 2024. This rise in adoption of this alternative payment method is linked to two main factors:

  • Firstly, the significant growth in e-commerce sales due to the pandemic and increased digitalization.
  • Secondly, the change in payer behavior as there is a gradual migration from credit card payments, which have high interest fees, to alternative options. Flexible payment options like BNPL provide a way of spreading the cost of payments over time, but without attracting high interest fees.

Proliferating RTP platforms and services hosted on them

The adoption trends are not just about digital wallets or BNPL. There is now significant investment in market infrastructures around the world feeding the demand for real-time payments (RTPs) via domestic instant infrastructures, which are increasingly going cross-border under the SEPA in Europe or bilaterally as with Singapore and Thailand.

According to the latest global payments report from ACI Worldwide, more than 70.3 billion real-time payment transactions were processed in 2020 around the world. Importantly, domestic faster payment schemes are moving cross-border too, with the connection between Singapore’s ‘Pay now’ scheme linking to Thailand’s ‘Prompt pay’ scheme blazing a trail for the future. This allows individuals to transfer money cross border using just a mobile phone number thanks for the back-end connection. Launched in 2021, this is the first link between the two countries’ national instant payment systems. Many more can be expected globally.

Finally, we are seeing yet more payment innovation being built atop these new instant payment market infrastructure rails, such as mobile proxy payments. Request to Pay (RTP) is another example. It is based on secure messaging between the consumer and the biller (or merchant) to improve the control, flexibility and transparency around making purchases and paying bills, with the added benefit of instant funds movement. As an example, it could be used to supply a restaurateur with food for that evening’s service based on an account or credit assessment with automation throughout the service.


Advances in technology, most notably the smartphone, have provided the opportunity for new business models that can deliver a more personalized, frictionless, and instant CX. The back-end investment in instant payment infrastructures has also provided a platform for innovation with banks and fintechs developing data-rich real-time data processing options.

Multiple forces of change have shaped the current payments’ ecosystem, which has seen a transformation from the legacy payment methods of cash, cheques and cards to realtime instant payments, digital wallets, Request to Pay, and BNPL options, all increasingly embedded as part of the evolving e-commerce journey, which may soon span to include digital currencies and ecosystem links powered by DLT and open APIs.

Looking at the above through a corporate treasury lens, while embracing change, it is important to keep things client driven. Flexibility around choice of payment method, convenience, security, data and frictionless processing of payments to increase speed will become the de-facto standard in the world of e-commerce. Treasurers must be aware of these implications and ready.

Want to know more? Check out the 2022 AFP and Zanders Whitepaper: Payments Innovation and Corporate Treasury Impacts — Beyond the Hype to find out what the digital transformation in the payment ecosystem means for corporate treasurers.

Excerpted from the 2022 AFP and Zanders Whitepaper: Payments Innovation and Corporate Treasury Impacts — Beyond the Hype.

*Statista - Most popular in-store payment methods in the U.S. 2017-2021

**Daxue Consulting 2019.

***Payment and Clearing Association of China (2020).

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