Consumers moving at speed towards local payment methods – merchants should embrace the change

A new white paper from local payment specialists, Boku adds to an emerging consensus that, across the world, consumers are beginning to turn their backs on card-based payments and card-linked wallets.

As outlined in the paper, “What 19th century economic thinking can teach us about 21st century payments – and how e-commerce players ought to respond“, Boku has worked with Juniper Research to analyse e-commerce payment data from 37 major markets worldwide.

Together, they highlight global, regional, and country specific trends, and present mid-term forecasts.

And they conclude that, across the world, consumers are rapidly adopting new payment preferences and exhibiting new behaviours.

By 2028, card-based payment, including card-linked wallets, is set to account for just 41% of global e-commerce payment value – down from 50% in 2022.

Regional Differences

Even in regions where card-based payments currently dominate, the shift is underway and gaining momentum.

In North America, card-based payment is predicted to fall from 76% in 2023 to 66% in 2028. In Europe, over the same timescale, it will slip from 71% to 57%.

In other regions, where card-based payment starts with a lower share, the shift looks destined to be starker and swifter.

Boku is not a lone alone, with several other analysts reaching similar conclusions.

In its latest Global Payment Report, McKinsey & Company says the world is on the cusp of a new payment era, moving from the Account Era to the Decoupled Era.

A driving force, it believes, will be consumers, who “have an even greater voice than in the Account Era as they seek convenience, affordability, and security”.

Similarly, in its 2024 Global Payments Report, Worldpay says: “We’re entering an era where choice is the main driver of the payment landscape. Consumers and their collective choices are the new centre of payments gravity.”

It’s likely that many e-commerce merchants may be exasperated by the shift. Having spent so much time and effort perfecting their card-based payment flows, the last thing they want is a new disruption.

And to complicate matters, the emergence of local payment methods means that, instead of benefiting from a consistent or harmonised global approach to payments, e-commerce merchants will need to accommodate a myriad of country-specific schemes and nuances.

Boku argues that, in fact, there are good reasons for digital merchants to embrace and enable the change.

That’s partly because it makes sense from a customer service perspective, with added payment choice having a profound impact on conversion rates. And it’s partly because it makes sense from a commercial and operational perspective, because some of the newer payment options are simply a more elegant and fit-for-purpose way of processing digital payments.

In the paper, Boku concludes: “Digital merchants should therefore view the emergence of additional payment methods, not as an encumbrance, but as an opportunity for innovation, differentiation, and operational efficiency.”

Download a free copy the new white paper now for more on how the rise of local payment methods are going to impact the way we do business in the future.


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