Payments revolution

How ecommerce is reshaping the global payment market

Ecommerce – for both digital and physical goods – is the driving force behind the evolution of payments. Paul Skeldon kicks off a deep dive into this evolution with a look at the global ecommerce payment market and how it is reshaping an industry

By 2029, the value of global ecommerce transactions will reach $11.4 trillion, up from $7 trillion in 2024. To put that into some kind of perspective, the GDP of the entire US is expected to be around $28trn, a little over twice what ecommerce brings in. If you want a starker comparison, global ecommerce is worth more than the combined wealth of Germany, Japan and India. Ecommerce is big business. Very big business.

And all that stuff has to be paid for. Whether it is digital or physical goods – and increasingly the line between the two is greying – consumers want to be able to pay easily and conveniently for these things. This is having a profound effect on the payments landscape. The traditionally hegemony of banks and credit card companies is yielding to a bunch of disruptors, both in a business sense and technologically.

According to research by Juniper Research in October, this substantial 63% growth will be driven by the adoption of ecommerce across emerging markets in Asia, Africa, LatAm and the Middle East. In these regions, Alternative Payment Methods (APMs, or alt.payments) will enable noncard-centric market consumers to purchase online for the first time.

For those that don’t know, APMs are any cashless and cardless way of transferring funds, such as digital wallets and account-to-account (A2A) payments.

According to Juniper, by 2029, 360 billion ecommerce transactions will be made using APMs, constituting 69% of global ecommerce transactions – processing $7.9 trillion, twice the GDP of Germany.

As APMs make ecommerce payments more inclusive, unbanked consumers in emerging markets will shift their purchasing habits online. This shift will be complemented by increased investment in delivery ecosystems, making deliveries more viable and increasing ecommerce’s value proposition and thus perpetuating more growth and more payments.

EMERGING MARKETS

It is these emerging markets where the real growth with spring from. Alternative payment options have grown substantially, with APM transaction volumes leapfrogging cards, in emerging markets. As merchants look to attract new users and geographies, they must consider offering APMs a key strategy to accomplish this.

While the developed world sees ecommerce growing at 8.4% a year between 2023 and 2024, accounting for 20% of all retail sales, in emerging markets, ecommerce is growing at more like 20% a year, albeit from a smaller base.

A lot of this growth is coming from Asia, where internet penetration is set to hit 94% in 2025 and where a number of markets – the Philippines, Thailand and Malaysia in particular – are really exploding.

But it is across India, North Africa and parts of the Middle East, where the real potential lies. These markets are only now ‘coming up’ and, with the exception of India, are yet to truly see an ecommerce explosion. Here, infrastructure is starting to expand and internet penetration is rising. However, it is the development of alt.payments that is going to really make it take off.

In the Middle East, carrier billing has brought about the start of the digital commerce revolution, making it relatively easy for consumers to start to consume content and services on their mobiles without having to have a bank account. Likewise, service providers and content providers have also managed to rapidly create a market for these services off the back of this ease of payment

For many markets this means adopting a range of new services. In others, it sees existing players – not least card companies such as Mastercard –working to create new methods of payment to tap into these markets (see panel).

What is increasingly clear in these markets is the need to combine payment methods into a pallet of options – and then to allow merchants to properly orchestrate how they use them.

A prime example is how Geidea, one of the Middle East, Turkey and Africa (META) region’s leading financial technology companies, has teamed up with tpay, the leading payment connector in the region, to reshape the digital payments space by offering an integrated suite of payment methods, including Direct Carrier Billing (DCB), card payments and ewallets – all accessible through a single aggregator. This collaboration is designed to enhance the payment experience for merchants and consumers while driving financial inclusion across the region.

By combining Geidea’s established network with tpay’s expertise, the partnership is poised to accelerate merchant acquisition and unlock new growth opportunities in key markets. It empowers merchants with secure and flexible payment solutions that cater to evolving customer preferences, fostering greater financial inclusion.

“This partnership represents a significant milestone in our mission to offer merchants a full spectrum of payment options within a single platform,” says Eslam Gaber, VP of Commercial at tpay. “By integrating our capabilities, we provide a comprehensive solution that meets the diverse payment needs of merchants, enhancing their ability to serve customers seamlessly.”

tpay CEO Isik Uman adds: “Joining forces with Geidea allows us to complement our existing presence by adding new payment methods that deliver even more value to our merchants. We’re not just expanding our offering; we’re providing a versatile, unified payment solution that drives digital transformation and financial access across META.”

A spokesperson from Geidea says: “Integrating Direct Carrier Billing into our payment platform further enriches our offering, ensuring merchants have access to innovative payment solutions that elevate the customer experience. This collaboration underscores our commitment to seamless, secure, and inclusive payments throughout the region.”

THINK LOCAL

Just like ecommerce itself, this rapid and profound expansion of consumption of goods and content and the payments methods needed to support it, is borderless. The growth of these emerging markets make them highly attractive to foreign players. Just look at how companies such as Shein and Temu have broken out of China and come to dominate ecommerce in the US and the UK. The same is happening across emerging market, with players from all over the world looking to cash in on the growth.

For these companies – and the payment service providers (PSPs) that support them – there is a huge need to not only offer a range of payment types online, but also to make sure that they are the preferred types for each country and region.

According to Juniper Research analyst Lorien Carter in the report: “In order to effectively operate internationally, merchants need to offer customers local payment types they are familiar with, in their preferred currency, so they don’t get put off by having to calculate the exchange rate.

“Traditionally, this means making multiple partnerships with acquirers and necessitates multiple integrations. However, businesses can now integrate one service to handle all of their local payment needs, ensuring a more efficient and faster launch. Furthermore, merchants do not have to keep up with rapidly changing consumer demands for payment methods, instead relying on their partner to update their connections regularly.”

LOCAL ACQUIRERS

According to Carter, merchants need to work with local acquirers, as they know the market and they have higher authorisation rates. This is due to the transactions occurring in a familiar environment for the issuing bank, which increase regulatory compliance and authorisation.

“This insider knowledge leveraged by the local acquirer allows them to more accurately assess the legitimacy of purchases, reducing the chance of false declines,” says Carter.

She adds: “Additional benefits of this include being able to leverage domestic licenses to lower payment costs on cross-border connections. Transactions are also less likely to incur currency conversion charges and cross-border fees, benefiting the merchant.” A win-win-win.

How Orange Middle East and Africa and Mastercard partner to digitise payments across Africa by 2025

With only 48% of the adult population in Africa banked, according to the African Digital Banking Transformation Report, the recently announced collaboration between Orange and Mastercard is designed to accelerate financial access, contributing to the financial empowerment of underserved communities in Cameroon, Central African Republic, Guinea-Bissau, Liberia, Mali, Senegal and Sierra Leone.

Orange Money customers will be able to instantly obtain a virtual or physical debit card, linked directly to their Orange Money wallets. These cards will allow seamless payments both locally and internationally, enabling transactions with local merchants and on any website or mobile app that

accepts Mastercard. Customers can easily request their virtual debit card via Max it— Orange’s Super App—and collect a physical card at a designated Orange Money Mastercard point of sale.

Speaking on the partnership, Aminata Kane, CEO Orange Money Group, Middle East and Africa, says: “This collaboration is an opportunity to bring top notch innovation to our customers, allow to pay with the Mastercard card linked to their Orange Money wallet when they travel internationally, and give them access to online shopping all over the world, in a simple and secure way. By offering our users the ability to pay effortlessly with Mastercard virtual card, we open the door to a world of new possibilities and promote their financial independence.”

Amnah Ajmal, Executive Vice President Market Development, Mastercard EEMEA adds: “At Mastercard, we are committed to advancing financial inclusion by leveraging cutting-edge technology to create meaningful, scalable impact. Our collaboration with Orange Money represents a significant step in unlocking the full potential of digital financial services across Africa, enabling millions to participate in the global economy. This collaboration is a testament to our vision to building an inclusive digital ecosystem that leaves no one behind.”