Next Generation Payment Part 3 – US payment methods on the road to success
The trend goes to alternative payment
While China is trying to gain a foothold in Europe with Alipay and WeChat payment methods from the U.S. with apps such as Visa, Mastercard and U.S. wallets such as Paypal, Apple Pay, Amazon Pay and Google Pay have long been a fixture in the German payment landscape. One main reason for this is certainly the possibility for German customers to actively use the U.S. payment services, while Alipay and WeChat have so far been reserved exclusively for Asian users.
Similar to Germany, the U.S. has a preference for cash. Nevertheless, change is evident in all areas. Among other things, alternative payment methods already account for 30% of e-commerce sales in the U.S. and are expected to reach 47% by 2022 [1].
Amazon Pay has over 300 million active customers worldwide and offers them a quick and easy payment experience by using their existing Amazon account. Users can shop at online stores that have integrated Amazon Pay using their familiar payment method and secure discounts. Alexa even lets you pay by voice.
Apple Pay works similarly; this mobile payment method is also already available in online stores and currently has 507 million users. Apple Pay customers can pay in stores via iPhone or Apple Watch, and the digital wallet can also be used on the iPad or MacBook. Many apps, for example from cab companies or delivery services, have also integrated Apple Pay as a payment method.
Google is expanding its service
Google Pay is also a wallet in which the 100 million customers can deposit their cards, just as they can store tickets or vouchers. The mobile payment method is embedded in Google Services and thus offers, for example, the possibility to buy a ticket for the subway in Google Maps. Google Pay works both stationary and online.
PayPal as an in-house winner
But PayPal has the world’s largest wallet with 426 million customers who appreciate the secure and fast payment process. In Germany, 57% prefer PayPal as a payment method for online shopping [2] and American customers are also more likely to trust PayPal than other payment apps. PayPal had a great impact on payment behavior from the beginning and established the beginning of the rise of alternative payment methods. Since May 2020, PayPal has offered contactless payment via QR code in the U.S., which is also expected to greatly increase the use of QR codes in general in the U.S. [3].
Buy now pay later payment solution on the rise
There is another alternative payment method that is enjoying great success in the States: Klarna. The Swedish company was founded in 2005 and currently offers its customers a smart and flexible shopping solution in 17 countries. The payment method can be used both online and via app in physical stores and enables installment payments without interest [4]. Since October 2020, Klarna has been gaining 1 million new American users every month, and well-known brands such as Lululemon, Sephora, and H&M are part of its retail portfolio.
Big brands in the US like Walmart, Starbucks or Macy’s already accept QR Code payments and also in Germany PayPal is starting to establish the new payment method in our country with Munich Airport.
[1] https://tearsheet.co/payments/the-rise-of-alternative-payment-methods-around-the-world/
[2] https://omnisecure.berlin/ibi-studie-so-bezahlt-deutschland-beim-online-shopping/
[3] https://www.versatilecredit.com/blog/qr-code-payment-adoption-growth-expected/
[4]https://www.klarna.com/international/press/klarna-continues-strong-us-growth-reaching-record-highs-in-customers-retail-partners-and-consumer-app-downloads/
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