GLOBAL PAYMENT GATEWAYS OF THE FUTURE - Nielsen · GLOBAL PAYMENT GATEWAYS OF THE FUTURE C 2014 T N...
Transcript of GLOBAL PAYMENT GATEWAYS OF THE FUTURE - Nielsen · GLOBAL PAYMENT GATEWAYS OF THE FUTURE C 2014 T N...
1GLOBAL PAYMENT GATEWAYS OF THE FUTURE Copyright © 2014 The Nielsen Company
G L O B A L PAYM E N T G AT E WAY S O F T H E F U T U R E FEBRUARY 2014
2 GLOBAL PAYMENT GATEWAYS OF THE FUTURE
T H E M O V E M E N T TO WA R D A C A S H L E S S S O C I E T Y Competition for consumers’ wallets is gathering pace as a result of the
transformation of the payments ecosystem that is being driven by the
introduction and adoption of contactless payment technology, multi-
currency cards, changes in regulations, and the advancement of Internet
retailing and mobile banking. Each of these factors is accelerating the
movement away from cash toward electronic payments. Technological
advancement has also introduced new options and new competition.
Credit cards are now joined by other convenient payment methods that
have entered the ecosystem. Stored value cards allow for contactless
payment at the point of sale, providing swipe-and-go convenience for
shoppers, and mobile wallets can debit a customer account tied to either
a bank account or a payment card.
Consumer needs are also evolving. There is a growing demand for
greater choice and more personalization of services. Consumers
expect rewards for their card loyalty through either promotions offering
discounted shopping and advance sale privileges or the accumulation
of points redeemable for travel or other services. Increased overseas
spending trends on e-commerce, education and travel have also created
a preference for consumers to pay in their home currency.
To better understand how payment preferences are evolving around
the world, Nielsen conducted a global survey, which polled more than
30,000 Internet respondents in 60 countries. The findings reveal that
one out of every two people around the world use plastic rather than
paper as their preferred payment method for daily spending. As the card
market becomes more competitive, strategic marketers that know how
to drive usage will be rewarded with loyalty.
ABOUT THE GLOBAL SURVEY METHODOLOGY
The findings in this survey are
based on respondents with online
access across 60 countries. While
an online survey methodology
allows for tremendous scale
and global reach, it provides a
perspective only on the habits
of existing Internet users, not
total populations. In developing
markets where online penetration
has not reached majority
potential, audiences may be
younger and more affluent than
the general population of that
country. Additionally, survey
responses are based on claimed
behavior, rather than actual
metered data.
3GLOBAL PAYMENT GATEWAYS OF THE FUTURE Copyright © 2014 The Nielsen Company
A P R E F E R E N C E F O R P L A S T I C O V E R PA P E RWhile consumers set up automatic payments for large ticket items such
as automobile, insurance and mortgage payments, global consensus
shows that consumers prefer to use payment cards over cash for general
shopping, dining, travel and entertainment purchases. The growing
penetration of smartphone adoption and the development of mobile
(e-wallet) applications will likely further advance the cashless trend.
More than half (54%) of global respondents in Nielsen’s survey
prefer using cards to any other payment method for daily spending.
The most preferred payment vehicle is credit cards, with 29 percent
of global respondents choosing credit cards; and an additional 23
percent choosing debit cards and 2 percent selecting prepaid cards.
A considerable opportunity for growth in the cards market exists, as
39 percent of respondents still use cash as their preferred means of
payment.
The rising global population, coupled with an increase in disposable
incomes and urbanization, has increased dependence on digital devices
for information in emerging economies. This trend is clearly evident
in Asia-Pacific, which shows a higher preference for using credit cards
compared with the global average. China, Hong Kong and Singapore
respondents all show a stronger preference for using plastic for payment
rather than cash. This is further supported by the rapid penetration of
smartphone and digital devices and the growing appetite for ecommerce
in these markets.
In highly competitive markets, qualified cardholders can choose to
subscribe to multiple cards from numerous issuing banks and non-bank
financial institutions, and between credit and debit card payments and
non-card payments, such as cash at merchant stores. Given the increase
in the number of payment options in consumers’ wallets, banks need
to fine-tune payment card marketing activities and product strategies to
not only accelerate transactions per card, but to also maintain customer
loyalty.
4 GLOBAL PAYMENT GATEWAYS OF THE FUTURE
CARDS (CREDIT, DEBIT, PREPAID) CASH
STRONG PREFERENCE FOR CARDS OVER CASH IN ASIAN MARKETS
When it comes to your daily spending routine what is your MOST preferred payment vehicle?
GLOBAL AVERAGE
54 39
CHINA
71 22
HONGKONG SINGAPORE
37 4060 55
Source: Nielsen Global Survey of Saving and Investment Attitudes, Q3 2013
5GLOBAL PAYMENT GATEWAYS OF THE FUTURE Copyright © 2014 The Nielsen Company
W H I C H C A R D TO C H O O S E ?When it comes to choosing a credit card, there’s no shortage of variety—
from low-rate cards to standard cards without an annual fee to premium
cards that offer rewards and loyalty features. But today’s consumers
are not only drawn to cards for their rewards, security and protection,
they are also influenced by merchant promotions and special offers
at the point of sale. Advanced technologies at the point of sale allow
merchants to offer promotions and support spending across multiple
cards, making purchase transactions seamless and easy for consumers.
To help drive purchase volume, card issuers have designed cards and
related promotions for specific purchases. Today, banks issue cards that
are used exclusively for children attending college/higher education
or cards designed to incent travel loyalty by offering points for airline
tickets, hotel rooms and car rental purchases. Consumers have defined
specific uses for the cards in their wallets, too. For example, given
the limited transaction detail on cardholder statements from online
merchants using PayPal, AliPay, BPay or other alternate payment
providers, consumers may have one card that is used exclusively for
online purchases.
Nielsen information shows that 39 percent of respondents around the
world use one payment card on a regular basis, 37 percent use two,
14 percent use three and 10 percent use more than three cards. When
asked their preference for card brand, 43 percent of global respondents
selected Visa, followed by 20 percent choosing MasterCard. In China,
a majority 67 percent of respondents said they use Union Pay as their
primary payment card.
Source: Nielsen Global Survey of Saving and Investment Attitudes, Q3 2013
*In China, 67% said they use Union Pay.
43%
20%
17%*
2%
Visa
MasterCard
Union Pay
American Express
GLOBAL AVERAGE
WHAT IS THE BRAND OF YOUR PRIMARY PAYMENT CARD?
6 GLOBAL PAYMENT GATEWAYS OF THE FUTURE
L OYA LT Y H A S B E N E F I T S To maintain customer loyalty and market leadership in the evolving
payments market, issuers need to create marketing strategies that
not only differentiate products from other issuers, but they also need
to manage the influence and advancement of non-bank and mobile
payment providers.
And the stakes are high. Global credit, debit and prepaid card purchase
transactions are expected to reach 289 billion by 2018, representing
a 74 percent increase from purchase transaction volumes from
2012 (according to a January 2014 Nilson Report). Additionally, the
transaction volume in Asia-Pacific is expected to reach 71 billion by 2018,
representing nearly 25 percent of the total marketplace. Mobile purchase
transactions also continue to grow significantly, with the global market
more than tripling in the last two years. The growth of e-commerce
transactions in Asia is expected to top $400 trillion in 2014, capturing
more than one-third of global B2C e-commerce sales, according to
global estimates by eMarketer.
As consumers have become more discriminate, they are ready to switch
providers if a better card reward program arrives. Knowing when, how
and where to reach consumers is critical to further deepen cardholder
loyalty. Transaction data offers banks, merchants, and card providers
rich information about customer spending patterns and preferences,
which can be used to better understand the correlation of issuance and
activation to merchant acceptance. Providers who offer reward programs
and promotions designed specifically to meet the future purchase needs
of cardholders stand a greater chance of driving increased transaction
volume and loyalty from customers, resulting in increased in sales
volumes for the merchants.
7GLOBAL PAYMENT GATEWAYS OF THE FUTURE Copyright © 2014 The Nielsen Company
T H E R I S E O F M O B I L E M O N E Y As the first thing most of us pick up in the morning and the last thing
we set down before sleeping, digital devices continue to play a central
role in our lives. And with banks now working with telecom operators
and handset manufacturers to securely store payment card details into
smartphones, the use of mobile wallets is picking up pace.
When it comes to cyber-safety concerns, more than half of global
respondents (54%) are not worried about shopping online and using
their payment card on either a smartphone or tablet device as long as
their personal information is protected. One in four global respondents
say they might use their credit or debit cards for online payment, and
one-fourth (26%) would not use their cards on a either smartphone
or tablet. Respondents in Asia-Pacific (65%) and Latin America (54%)
report the highest levels confidence to use their payment cards on their
smartphone or tablet device.
WOULD YOU SHOP ONLINE WITH A SMARTPHONE OR TABLET IF YOUR PAYMENT CARD WAS STORED SAFELY?
65%
54%
45%
41%
38%
ASIA-PACIFIC
LATIN AMERICA
MIDDLE EAST/AFRICA
NORTH AMERICA
EUROPE
YES
Source: Nielsen Global Survey of Saving and Investment Attitudes, Q3 2013
8 GLOBAL PAYMENT GATEWAYS OF THE FUTURE
Nineteen percent of global respondents use an e-wallet as their
preferred payment vehicle for daily spending. Usage is slightly higher
in Asia-Pacific, where 23 percent of respondents use an e-wallet for
purchases; with respondents in New Zealand and China reporting levels
above the regional average, at 44 percent and 30 percent, respectively.
Source: Nielsen Global Survey of Saving and Investment Attitudes, Q3 2013
E-WALLETS USAGE IS STRONG IN ASIA-PACIFIC
GLO
BAL
AVER
AGE
NEW
ZEA
LAN
D
CH
INA
VIET
NAM
AUST
RALI
A
HO
NG
KO
NG
SIN
GAP
ORE
ASIA
-PAC
IFIC
19%
23%
44%
30%
25%22% 21%
18%
Percent using an e-wallet as the preferred payment vehicle for daily spending
9GLOBAL PAYMENT GATEWAYS OF THE FUTURE Copyright © 2014 The Nielsen Company
O N L I N E S H O P P I N G B O O N The speed of the Internet, accelerated adoption of mobile applications,
and enhanced payment security have enabled consumers to shop from
the comforts of their home, browsing across multiple sites to check
availability and shop for the best price 24 hours a day, seven days a
week. Many vacations are no longer planned with the help and advice of
a local travel agent, but rather are decided by researching travel websites
for top rated hotels and tourist attractions, upcoming events and local
activities. Today’s travelers have access to up-to-the-minute details
about package promotions and special value airfares. Many airlines
offer discounted fares if tickets are purchased online, with additional
privileges for using a partner card for payment. In the digital world, the
consumer truly shops in a global market place.
Asian respondents are more interested in shopping online at merchants
that do not have a local presence. Only 16 percent of Asia-Pacific
respondents in Nielsen’s 2011 online survey have interest in a site that
also offers local brick and mortar in-store shopping. Forty percent of
these respondents prefer shopping at sites that are only available online.
While online shopping provides greater convenience and variety, it also
offers the benefit of online product reviews. Nielsen information shows
that 63 percent of online purchasers in Asia-Pacific use social media
sites to help drive purchase decisions.
10 GLOBAL PAYMENT GATEWAYS OF THE FUTURE
GLOBAL AVERAGE ASIA-PACIFIC
Computer Software 29% 35%
Computer Hardware 25% 33%
Hardcopy Books / Newspapers /
Magazines33% 42%
Digital Books / Newspapers / Magazines 20% 26%
Travel Reservations 30% 34%
Entertainment Tickets 30% 34%
Clothes / Shoes / Jewelry 37% 46%
Mobile Phone 26% 33%
Digital Camera 21% 29%
Skin Care / Cosmetics 25% 34%
Health Products / Excercise Equipment 17% 22%
Food & Beverage 26% 37%
Household Appliance 22% 26%
Furniture / Household Decoration 15% 18%
Household Cleaning Supplies 16% 22%
ONLINE SHOPPING INTENTIONS IN ASIA-PACIFIC IS STRONGER THAN THE GLOBAL AVERAGE What categories of products do you plan to purchase on any connected device in the next 3 to 6 months?
Source: Nielsen Global Survey of Digital Shopping, Q1 2012
11GLOBAL PAYMENT GATEWAYS OF THE FUTURE Copyright © 2014 The Nielsen Company
M O R E C H O I C E R E Q U I R E S N E W T H I N K I N G As payment innovations, such as e-wallets, multi-currency cards and
alternate online payment processors become more widely accepted, the
ease of making purchases will likely drive consumers to spend more
frequently.
The increased usage of mobile phones to access the Internet will further
propel online shopping for goods and services. And with the continued
shift of wealth from the west to the east, a particular focus is on China—
one of the fastest-growing consumer markets in the world.
To keep pace with changing spending behaviors, strategic card issuers
rely on enhanced insights to understand cardholder behaviors and to
develop products and promotions that are more closely aligned with
spending patterns. Banks that offer cardholder promotions and rewards
at the right time, in the right place and with the right message will be
rewarded with customer loyalty.
12 GLOBAL PAYMENT GATEWAYS OF THE FUTURE
Source: Internet World Stats, June 30, 2012
MARKET INTERNET PENETRATION
AUSTRALIA 89%
CHINA 40%
HONG KONG 75%
INDIA 11%
INDONESIA 22%
JAPAN 80%
MALAYSIA 61%
NEW ZEALAND 88%
PHILIPPINES 32%
SINGAPORE 75%
SOUTH KOREA 83%
TAIWAN 75%
THAILAND 30%
VIETNAM 34%
MARKET INTERNET PENETRATION MARKET INTERNET
PENETRATION
MARKET INTERNET PENETRATION
AUSTRIA 80%
BELGIUM 81%
BULGARIA 51%
CROATIA 71%
CZECH REPUBLIC
73%
DENMARK 90%
ESTONIA 78%
FINLAND 89%
FRANCE 80%
GERMANY 83%
GREECE 53%
MARKET INTERNET PENETRATION
EGYPT 36%
PAKISTAN 15%
SAUDI ARABIA 49%
SOUTH AFRICA 17%
UNITED ARAB EMIRATES
71%
MARKET INTERNET PENETRATION
CANADA 83%
UNITED STATES 78%
COUNTRIES INCLUDED IN THIS STUDY
ASIA-PACIFIC
EUROPE
MIDDLE EAST / AFRICA
NORTH AMERICA
LATIN AMERICAEUROPE
HUNGARY 65%
IRELAND 77%
ISRAEL 70%
ITALY 58%
LATVIA 72%
LITHUANIA 65%
NETHERLANDS 93%
NORWAY 97%
POLAND 65%
PORTUGAL 55%
ROMANIA 44%
RUSSIA 48%
SERBIA 56%
SLOVAKIA 79%
SLOVENIA 72%
SPAIN 67%
SWEDEN 93%
SWITZERLAND 82%
TURKEY 46%
UNITED KINGDOM
84%
UKRAINE 34%
ARGENTINA 66%
BRAZIL 46%
CHILE 59%
COLOMBIA 60%
MEXICO 37%
PERU 37%
VENEZUELA 41%
13GLOBAL PAYMENT GATEWAYS OF THE FUTURE Copyright © 2014 The Nielsen Company
ABOUT NIELSEN Nielsen Holdings N.V. (NYSE: NLSN) is a global information and
measurement company with leading market positions in marketing
and consumer information, television and other media measurement,
online intelligence and mobile measurement. Nielsen has a presence in
approximately 100 countries, with headquarters in New York, USA and
Diemen, the Netherlands.
For more information, visit www.nielsen.com
Copyright © 2014 The Nielsen Company. All rights reserved. Nielsen and
the Nielsen logo are trademarks or registered trademarks of CZT/ACN
Trademarks, L.L.C. Other product and service names are trademarks or
registered trademarks of their respective companies. 14/7469
ABOUT THE NIELSEN GLOBAL SURVEY The Nielsen Global Survey of Saving and Investment Strategies was
conducted between August 14 and September 6, 2013, and polled more
than 30,000 consumers in 60 countries throughout Asia-Pacific, Europe,
Latin America, the Middle East, Africa and North America. The online
shopping findings on pages 9 and 10 in this report are from the Q3
2011 and Q1 2012 Global Surveys of Online Shopping Intentions. The
sample has quotas based on age and sex for each country based on
their Internet users, and is weighted to be representative of Internet
consumers and has a maximum margin of error of ±0.6%. This Nielsen
survey is based on the behavior of respondents with online access only.
Internet penetration rates vary by country. Nielsen uses a minimum
reporting standard of 60 percent Internet penetration or 10M online
population for survey inclusion. The Nielsen Global Survey, which
includes the Global Consumer Confidence Survey, was established in
2005.
14 GLOBAL PAYMENT GATEWAYS OF THE FUTURE