An early adopter of new payment technologies, New Zealand is at the forefront of the transition towards alternative payment methods, according to a new report released from financial technology firm FIS.
The ‘2022 Global Payments Report‘ by Worldpay from FIS, now in its seventh year, examines current and future payments trends across 40 countries. It found that New Zealand’s e-commerce market will continue to demonstrate substantial growth of 38 percent between now and 2025.
At the same time, buy-now, pay-later (BNPL) is already strong with 10 percent of e-commerce transaction value in 2021. This is forecasted to represent 17 percent of e-commerce transaction value in New Zealand by 2025, surpassing the report’s predictions for Australia (14 percent) and the UK (12 percent). At point-of-sale (POS), BNPL is projected to represent six percent of offline transaction value by 2025, second only to Sweden globally.
E-commerce payment trends
The FIS report also found:
- New Zealand’s e-commerce market is set to grow at a compound annual growth rate (CAGR) of eight percent through 2025 to reach $ 8.5 billion (USD).
- New Zealand’s leading online payment methods in 2021 were credit/charge cards accounting for 34 percent of e-commerce transaction value, followed by digital wallets (20 percent), and debit cards (16 percent).
- Credit/charge cards are on track to maintain their position as the leading e-commerce payment method through 2025 with a projected 30 percent share of transaction value.
Point-of-sale (POS) Payment Trends
On point-of-sale trends, the report found:
- New Zealand’s leading in-store payment methods in 2021 were credit/charge cards at 42 percent of POS transaction value, followed by debit cards (31 percent) and cash (11 percent).
- Credit/charge cards are expected to comprise 36 percent of POS transaction value by 2025, retaining its position as the leading in-store payment method.
- Growing at 21 percent CAGR through 2025, mobile wallets are the fastest growing in-store payment method.
- The use of cash in New Zealand continues to decline and is projected to comprise just 10 percent of POS transaction value by 2025.
Phil Pomford, General Manager of Worldpay Merchant Solutions, APAC at FIS says: “One area that New Zealand really stands out in, is as an early adopter in the Buy Now Pay Later space. We’re predicting New Zealand to be at a 17 percent share of online payments and Australia at 14 percent by 2025. When you compare that with the global average share of five percent and Asia at two percent, then this part of the world is really outpacing other markets globally.”