Market Trends of North America Payments Industry
Increasing use of digital wallets payments
- The increasing use of digital wallet payments in North America reflects a significant shift in consumer behavior and the broader digital transformation of financial services. As technology continues shaping how people manage their finances, digital wallets have emerged as a convenient, secure, and versatile alternative to traditional payment methods.
- Also, the regulatory environment in North America has adapted to accommodate the rise of digital wallets, ensuring that these payment methods align with existing financial regulations. As governments recognize the importance of fostering innovation in financial services, regulatory frameworks have evolved to provide a supportive environment for the growth of digital payment technologies.
- Furthermore, the e-commerce platforms can accept various payment methods, making it easier for more users to access the business, such as major credit cards, gift cards, etc. E-commerce platforms such as Amazon, eBay, and Shopify frequently charge monthly and transaction fees to cover online payment processing fees.
- E-commerce sales in the United States are increasing as digital payment experiences improve. This rise reflects consumers' growing comfort with online shopping and their increased use of mobile and handheld devices.
- The buy-now-pay-later (BNPL) service is gaining popularity among North American consumers as an alternative payment solution. Consumers in the United States utilize BNPL for a variety of reasons, including purchasing items that would otherwise be beyond reach, avoiding interest on credit cards, and borrowing money without a credit check. Market participants are implementing various tactics to expand the adoption of BNPL. For example, in May 2023, Splitit announced its partnership with visa to offer merchants a buy now, pay later (BNPL) solution. Both the companies had signed an agreement in which Splitit’s installments-as-a-service offering is combined with Visa Instalments to form a BNPL solution that will be piloted in select markets during the second half of the year
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United States to hold a majority market share
- Credit cards are the most commonly used payment method in the United States and Canada, both offline and online, with debit cards coming in second. With the enhancement of digital payment experiences, the country's e-commerce sales are expanding. This growth reflects customers' growing comfort with online buying and their increased usage of mobile and handheld devices.
- Additionally, the Federal Reserve has integrated the United States' ACH system into local settling systems in Canada, the United Kingdom, the Eurozone, Mexico, and Panama, allowing individuals and companies to move cash directly from U.S. bank accounts to bank accounts in other countries. Financial technology firms are rapidly venturing into cross-border payments, notably peer-to-peer payments. Financial technology firms, for example, are joining the remittance sector, allowing users to fund "mobile wallets" online using their bank accounts and debit or credit cards and sending money straight to overseas mobile wallets.
- Moreover, retail instant payment systems execute small-value interbank transfers such that money is available almost quickly, as contrast to the possibly multiday settlement wait for retail transfers on some traditional bank payment systems. Like other retail payment systems, immediate payment systems often employ bank deposit money but eventually settle in central bank reserve balances. include the Clearing House's RTP Network (RTP), which began in 2017, and the FedNow Service, which the Federal Reserve aims to implement in 2023.
- Due to the growth of the digital payment market, mobile commerce has also changed the way brick-and-mortar businesses operate, particularly in terms of accepting cashless payments. Apple Pay, Samsung Pay, and Google Pay, for example, are among the leading competitors competing with market leaders in their respective countries. With consistent increases in mobile payment in several countries, the North American digital payment market is expanding rapidly.
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