Payment options may be in for a hefty shake-up over the next few years, with research suggesting a significant decline in the use of credit cards.
According to payment company Worldpay, credit card use may have peaked and will begin trending downwards by 2020, with Australia seeing among the biggest declines of any country.
Despite credit cards being the most popular payment method in 2016, used in 34 per cent of online transactions, Worldpay suggests the next few years will see a 15 percentage point drop in credit card usage.
Worldpay says this is not, however, a suggestion that e-commerce will decline. In fact, the Australian e-commerce market is expected to post solid growth of 10.4 per cent by 2020.
Instead, Worldpay says economic uncertainty and changes in technology will see consumers increasingly move away from all forms of personal debt and monitor their spending more closely.
As such, it expects to see a doubling in the use of prepaid cards, while bank transfers will overtake credit cards to become the most popular payment option.
If such a shift does eventuate, business owners will need to cater to the changing payment demands of their customers, allowing more flexible payment terms. This will be particularly pertinent for online retailers and e-commerce operators that rely solely on credit and debit card payments.
Taking digitisation out of the ‘too hard’ basket for SMEs
By Jason Brouwers
The insanity of consumer expectations
By Jason Dooris
Forget how big you are: always have a start-up mentality
By Simon Larcey