Consumer payments via QR code now represent one third of all brick-and-mortar payments in China, and this method of paying is set to grow in India and Africa in the near term, Juniper Research found in its latest report on digital commerce.
Chinese shoppers favor QR codes via apps like Alipay and WeChat Pay when paying for offline purchases in physical stores, which is what’s driving growth in this payment method at the moment. However, QR codes will see greater use when paying for online products going forward, the report noted. In China, Alipay accounts for 54 percent of mobile commerce by volume, and half of all its online retail transactions. Last year Alipay and WeChat Pay handled 45 percent of all payments for global e-commerce transactions, according to Juniper’s report.
Juniper expects consumer spending in the digital commerce arena will climb to $14.7 trillion by 2022. That’s a 60 percent improvement over 2017’s spending, which totaled $9.2 trillion.
The report also considers blockchain’s role in transforming financial technology (fintech). As it is, blockchain sprang up to serve as the backbone for Bitcoin, the most popular and well-known cryptocurrency, and now other industries are considering how the immutable, distributed ledger technology can benefit their sectors. It is believed that blockchain would help to standardize payment processing, and significantly reduce the error rate and time spent investigating errors. All of these factors are expected to reduce both the fees involved with payments systems and accelerate the timeframe in which financial transactions are settled.
For now, however, the rate of fraud online is growing, thanks largely to retailers’ transition to the EMV protocol offering greater security at the physical point of sale. Faced with diminishing returns for their fraudulent in-store efforts, criminals are setting their sights online, swindling digital merchants out of $11.5 billion over 156 million duplicitous transactions online for products both physical and digital last year, according to Juniper.