Buy Now, Pay Later is projected to grow faster than any other method of payment in New Zealand over the next four years, according to a new report released today from financial technology leader FIS® (NYSE: FIS).
The annual Global Payments Report by Worldpay from FIS, which examines current and future payments trends across 41 countries, found that global trends in digital commerce accelerated under the pandemic, pushing many nations much closer to becoming predominantly cashless markets.
With New Zealand’s eCommerce market continuing to grow amid the pandemic, the FIS report found:
Analysis in the report forecasts rapid growth of BNPL transactions over the next four years, as new players enter the market.
The explosion of BNPL could have significant consequences for eCommerce credit card transactions, projected to decrease from 37.6 percent in 2019 to 22.8 percent in 2024.
eCommerce is projected to grow from $5bn in 2020 to $7bn in 2024, an increase of 40 percent.
By 2024, eCommerce sales via mobile phones are projected to grow to 61 percent compared to 47 percent in 2020.
In-Store Payment Trends
The FIS report found:
Credit cards remain the most popular payment method for in-store purchases, accounting for almost 37 percent of transactions in 2020.
Digital wallets are the fastest growing payment method in-store and data in the report projects adoption will grow at 25 percent annually for the next four years.
With the rapid response to COVID-19 in New Zealand, cash payments have remained stable at point of sale (POS). Over the next five years, the cash economy is projected to decrease just 0.7 percentage points to account for 12 percent of in-store transactions in 2024. This is a marked contrast to their Australian neighbours, where the findings suggest that cash will account for just 2 percent of payments by 2024.
“Despite Kiwis bucking the global trend towards a cashless payments market, with the growth of Buy Now Pay Later New Zealand consumers are ushering in a new dawn in digital commerce,” said Phil Pomford, General Manager APAC, Worldpay Merchant Solutions at FIS. “Beyond BNPL, new technologies will continue to change how we pay, and businesses need to accommodate by diversifying payment methods. The shop floor is now in the palm of our hands and consumers expect the same hassle free and convenient shopping experience whether they are purchasing in app, through their social feeds or in the real world. To be successful it is vital merchants put customer experience at the heart of the checkout process. Those who increase their digital payments capabilities will be well-positioned to capture the next wave of growth in retail and eCommerce.”
About The Global Payments Report
Figures quoted are taken from data published in The 2021 Global Payments Report by Worldpay from FIS unless otherwise stated or referenced. This data was collected using consumer surveys, B2B surveys and input from local research teams. 46,000 consumers were surveyed globally. For research methodology, please refer to page 135 of the report. Digital wallets are mobile wallets such as Apple Pay, Google Pay and Samsung Pay that work only within a specific mobile operating system as well as digital wallets such as Alipay, WeChat Pay, Paytm and Amazon Pay that are operating system-agnostic.