Ecommpay, the international payment service provider, can increase its UK and EU market coverage by almost 50 per cent without cannibalising existing payment methods following a new partnership with GoCardless, the bank payment company. 

Together, Ecommpay now has the ability to offer direct debit payments for UK and EU businesses. Direct debit has seen a surge in popularity and consumer demand. In fact, it is now one of the UK’s most popular and trusted ways to pay, with 80 per cent of Brits having at least one to pay for their regular outgoings according to GoCardless.

Arthur Ribakovs, head of financial partnerships, Ecommpay said: “The addition of direct debit capabilities further expands Ecommpay’s already extensive portfolio, including global card acquiring via a single integration, Open Banking: Advanced, and 100+ local payment methods.

“With a full-stack proprietary ecosystem that ensures 99.999 per cent uptime and around-the-clock business and IT support, Ecommpay is not only strengthening its presence in the UK and Europe, but continues to improve its offering for FinTech and e-commerce merchants.”

Building on subscription service popularity 

A survey conducted by Ecommpay at the end of 2023 found that 54 per cent of UK consumers used subscriptions during the pandemic. Since then, 42 per cent have continued to do so and 14 per cent have even increased their usage. UK consumers have on average 1.6 active subscriptions, with 32 per cent using one regularly and 30 per cent using two.

In addition to evolving consumer payment preferences, businesses face challenges such as fraud prevention and reducing checkout abandonment rates. Recognising existing barriers and shifting end-consumer payment trends, Ecommpay has introduced direct debit payments as a proactive response.

The strategic partnership with GoCardless opens access for Ecommpay merchants to offer subscription-based payments across the UK and Europe. This includes improved acceptance rates and the security against fraud that comes with bank payments.

Deepak Colluru, director of product management for GoCardless Embed, said: “We’re extremely proud to help Ecommpay launch its direct debit offering, enabling its customers to tap into a payment option that is seamless, secure and highly preferred.

“Ecommpay’s speed to market is a testament to the simple ‘plug-and-play’ nature of GoCardless Embed, allowing payment service providers to access a global bank payment network in a matter of weeks. We look forward to helping millions of businesses realise the benefits of bank payments, from reducing costs, fraud and manual admin to increasing cash flow and conversion.”

“Cash is king” and “if it ain’t broke don’t fix it” are common phrases heard in the payments industry. However, digital payments have had an undeniable impact in the sector, and according to new research from Boku, the global network for localised payment solutions, there has been a continued decline in the market share of traditional card payments.

Produced in collaboration with Juniper Research, the Boku report, titled 2024 Global Ecommerce Report: The Changing World of Payments surveyed 10,500 consumers. It analysed data from 37 major markets across the globe to identify global, regional and country specific trends. The findings highlight significant and rapid consumer shifts in e-commerce payments away from the traditional card networks (and in emerging economies cash on delivery) towards local payment methods such as digital wallets.

Nick Maynard, VP of fintech market research, at Juniper Research said: “Our research for this report from Boku highlights that against a backdrop of continued strong growth in e-commerce, the global card schemes (credit, debit and card-linked wallets) continue to lose share to regional and local payment methods. This is a trend seen at an aggregate global level but also repeated in every region across the world.”

Emergence of A2A payments

Further findings revealed that account-to-account (A2A) payments (instant payments and bank transfers) such as PIX in Brazil, UPI in India, or iDEAL in the Netherlands are revealed as the fastest-growing payment method within e-commerce. A2A payments are forecast to more than double and become the fastest growing local payment method within e-commerce. This accounts for 18 per cent of all e-commerce transactions by volume by 2028 globally (up from eight per cent in 2023).

Furthermore, instant A2A and non-card-linked wallets will account for over 50 per cent of e-commerce transaction value globally by 2028.

Declining card transactions and growing local payment methods.

The report also found that card values will decline to 19 per cent of transaction value by 2028 (down from 31 per cent in 2023). By volume, card payments will account for just 30 per cent of e-commerce transactions in 2028 ( down from 41 per cent in 2023).

By 2028, local payment methods will account for 58% of ecommerce transaction values (up from 47 per cent in 2023), accounting for a majority of transaction value online for the first time. Boku also estimated that in four years 37 per cent of all individuals globally will actively use local payment methods.

Younger generations are paving the way

Payment choice is key for consumers around the world. Today’s mobile-first generations – with whom access to and affinity with card networks is low – prioritise the convenience and seamless nature of paying with digital wallets, direct carrier billing and Instant A2A payments. As with the adoption of many new technologies, the adoption of localised payment solutions by younger generations and populations is paving the way for adoption by older consumers.

Stuart Neal, CEO of Boku said, “Our research shows the way the world transacts online is changing fast, and that change is being driven in the main by a consumer preference for convenient, seamless payment methods like digital wallets, direct carrier billing and Account to Account transfers.

“Merchants now realise that the key to their future global growth and success lies in their ability to offer consumers more payment choice. At Boku, we’re excited to provide the world’s largest merchants with access to our global network of localised payment solutions so their customers can more easily pay for the things they love, the way they want – no matter where they are in the world.”

Regional takeaways include:

Africa & Middle East

Africa & Middle East is in many ways already a local payments and mobile money success story, with the region’s services such as M-PESA and MoMo seeing strong adoption. As such, merchants require highly localised payments strategies in these markets to ensure continued results.

Asia Pacific

Asia Pacific payment requirements are changing quickly. While card payments will continue to account for a significant amount of payments – around a third of e-commerce payments by volume by 2028 – local payment methods are fast gaining traction, winning market share from card payments.

Europe

Europe, in particular, will see a dramatic shift away from cards, with the proportion of e-commerce transaction volume featuring cards dropping from 53 per cent in 2023 to just 30 per cent in 2028. A2A payments will experience massive growth from 16 per cent volume of transactions in 2023 to 25 per cent in 2028, due to the ability it provides in moving money without additional intermediaries.

Far East and China

Far East and China is a mobile wallet-dominated market, with great emphasis on ‘super apps’ such as WeChat and Alipay. E-commerce payment methods are anticipated to stay somewhat consistent with this over the forecast period with little shift in the payment methods used, due to how well-established the market already is.

LatAm

LatAm is a market in motion – e-commerce payment methods are changing rapidly, which means merchants must alter their acceptance strategies, or they will fail to take advantage of e-commerce growth. PIX is the obvious early success story, but CoDi in Mexico, as well as PSE in Colombia are also winners.

North America

North America is a heavily-developed market in regards to e-commerce, with the majority of consumers having access to bank accounts and plastic cards. One of the greatest concerns for e-commerce consumers across North America is the ability to checkout seamlessly, as well as having the ability to pay in installments resulting in growth of lower friction payment methods such as; Buy Now Pay Later (BNPL), A2A payments and non-card-linked wallets.

The Indian Subcontinent

The Indian Subcontinent is seeing an increasing shift towards local payment methods, with A2A payments in particular gathering momentum. Local payment methods are anticipated to have a sizable share of payment methods by 2028, equating to 72 per cent of e-commerce transactions by value, an increase from 58 per cent in 2023.

India is the largest driver of both volume and value within the Indian Subcontinent, therefore it is unsurprising that the highly successful UPI scheme is driving local payments forward, providing a template for future growth.

Payments are arguably the face of fintech. When you think about financial technology, it is easy to think about solutions which are making payments faster, easier and more accessible.

Having debunked some of the biggest myths surrounding buy now pay later (BNPL), we now turn our focus on the technology’s potential. We reached out to the industry and asked if it believed BNPL could overtake credit card usage as new technologies rise in popularity.

Banks hold the power to take advantage of BNPL

Ralf Gladis, CEO, Computop said he did not think BNPL’s popularity would surpass credit cards due to it being “restricted primarily to online or in-store purchases, and many customers are happy to build up a good credit record by using their credit card.”

He continued: “What might be more relevant to look at is how banks can take a bigger share of the BNPL market. Accenture’s Global Consumer Payments Survey in 2022 found that four in ten customers would be more willing to adopt BNPL if it was a service offered by their main bank. As a result, banks are looking at how they embed this payment option into their platforms, and many are already doing it – Monzo and NatWest, for example.

“If they do this successfully – such as providing instant approvals and positioning themselves as the ‘responsible’ provider – the likelihood is that they will become the dominant players in the market.

Living together in harmony

A similar sentiment was shared by Edward Flanagan, partner at law firm, Shakespeare Martineau, who said credit cards and BNPL will live in symbiosis.

“Many banks are now embedding BNPL options into their consumer finance credit offerings in a bid to take advantage of the benefits of BNPL and to keep up with challenger fintech providers and, most importantly, safeguard their customer’s financial well-being.

“The adoption of BNPL by major banks and credit card companies gives the BNPL market an air of respectability – if they are offering it, it must be safe. Furthermore, credit cards are already regulated and so traditional credit providers are, arguably, in a better position to comply with any new BNPL regulation that may be implemented, which may involve applying for FCA approval and the associated burdens that come with that process.

“BNPL spending is on the increase but this doesn’t mean there is a corresponding drop in credit card usage as a result. Although increased credit card interest rates may encourage traditional card users to look at other less expensive repayment options, this is not an inevitable consequence. Research from Experian shows that consumers are not abandoning their credit cards in favour of BNPL.

Research says it all

Flanagan added: “According to Juniper Research, BNPL payments are expected to account for nearly a quarter of all global e-commerce transactions by 2026, up from just nine per cent in 2021. Younger generations prefer BNPL.

“Insider Intelligence forecasts 59 per cent of Gen Z and 53 per cent of millennials will make a BNPL payment in 2026, compared to 41 per cent of Gen X and 24 per cent of baby boomers. It’s a payment type that attracts all audiences, particularly Gen Z and millennials.

“GlobalData predicted that by 2026 in the UK, the credit card market size will reach $87billion in value of transactions while BNPL is expected to reach $47billion.”

Hope lies with the younger generation – but even then, there’s a long way to go

Moshe Winegarten, CRO, Ecommpay also looked at the technology’s users compared to those of credit cards to determine if it could out perform credit cards.

“Despite BNPL’s growth, it’s unlikely to surpass credit cards by 2025. At Ecommpay, we’ve observed BNPL’s popularity among younger demographics, while credit cards dominate among older millennials and baby boomers due to greater economic maturity and spending power. The BNPL market consolidation suggests it’s far from equal, let alone surpassing, credit card usage.”

Not a meteoric rise

Although BNPL’s popularity is driving considerable growth, it is not enough to truly advance the tech to a point it could overtake credit cards says Iryna Agieieva head of product payments at paytech Mollie.

“It’s highly unlikely that BNPL will surpass credit card usage by 2025. Despite its increasing popularity and 11 per cent CAGR growth, the credit card market significantly outweighs the BNPL global market. The growth rate, while fast, is not meteoric, and various challenges, including regulatory and socio-economic factors, have inevitably slowed down adoption. Like any emerging technology, BNPL expansion is likely to face constraints, making it unlikely to overtake credit cards in the near future.”

Serving different customer needs

Corinne Lleti, director general southern Europe, Provenir, the risk decisioning platform, identifies the benefits of both technologies. However, she does not see BNPL taking over anytime soon – although the possibility of it doing so in the future is not dismissed.

“Buy Now Pay Later is an attractive proposition for today’s consumers. The flexibility it offers, and the lack of interest is particularly alluring, making it the fastest-growing payment method. The global BNPL market is projected to reach $90.51billion by 2029.

“The growth of Buy Now Pay Later (BNPL) is undeniable as it provides consumers with an affordable way to split payments, as long as the payments are made on time. However, credit cards offer the advantage of being able to split payments on any product at any time, without requiring a specific offer. The practicality of credit cards has made them a convenient and versatile payment method, so it would be surprising if BNPL surpasses credit card usage by 2025.

“In the near future, both these payment methods will continue to exist with each serving a different consumer need.

“However, as BNPL becomes increasingly more widespread and credit-friendly, with numerous players entering the market, it’s likely to overtake credit cards as the preferred method of payment in coming years, although with increased regulation on the horizon, it will be certainly interesting to see how to industry will respond and whether the sector’s growth will be affected.”

A cultural shift is needed for meaningful change

Matt Purnell, research analyst Juniper Research, the market research firm, does not rule out BNPL overtaking credit cards, but he believes a lot of things must fall into place for the technology.

“Globally, no. Credit cards are too integrated in most countries that a massive but gradual cultural shift would be required for BNPL to become more prevalent. Additionally, not every country will see similar levels of BNPL adoption due to differing prevailing attitudes towards credit. However, BNPL is the one of the most used payment method for e-commerce transactions in markets like Sweden and Germany, so BNPL overtaking cards is a possibility that is dependent on a myriad of socioeconomic factors.”

Social media analytics company Graphika has stated that the use of “AI undressing” is increasing.

This practice involves utilizing generative artificial intelligence (AI) tools precisely adjusted to eliminate clothing from images provided by users.

According to its report, Graphika measured the number of comments and posts on Reddit and X containing referral links to 34 websites and 52 Telegram channels providing synthetic NCII services, and it totaled 1,280 in 2022 compared to over 32,100 so far this year, representing a 2,408% increase in volume year-on-year.

Synthetic NCII services refer to the use of artificial intelligence tools to create Non-Consensual Intimate Images (NCII), often involving the generation of explicit content without the consent of the individuals depicted.

Graphika states that these AI tools make generating realistic explicit content at scale easier and cost-effective for many providers.

Without these providers, customers would face the burden of managing their custom image diffusion models themselves, which is time-consuming and potentially expensive.

Graphika warns that the increasing use of AI undressing tools could lead to the creation of fake explicit content and contribute to issues such as targeted harassment, sextortion, and the production of child sexual abuse material (CSAM).

While undressing AIs typically focus on pictures, AI has also been used to create video deepfakes using the likeness of celebrities, including YouTube personality Mr. Beast and Hollywood actor Tom Hanks.

Related: Microsoft faces UK antitrust probe over OpenAI deal structure

In a separate report in October, UK-based internet watchdog firm the Internet Watch Foundation (IWF) noted that it found over 20,254 images of child abuse on a single dark web forum in just one month. The IWF warned that AI-generated child pornography could “overwhelm” the internet.

Due to advancements in generative AI imaging, the IWF cautions that distinguishing between deepfake pornography and authentic images has become more challenging.

In a June 12 report, the United Nations called artificial intelligence-generated media a “serious and urgent” threat to information integrity, particularly on social media. The European Parliament and Council negotiators agreed on the rules governing the use of AI in the European Union on Friday, Dec 8.

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