How 5G Will Revolutionize Retail Payments
Retail has increasingly become a mobile function to meet the needs of a constantly on-the-go consumer base, especially with the rise in popularity of mobile E- wallets. The introduction of 5G will only enhance innovations in retail technology and in turn, benefit the consumer.
While still in its infancy, there is an expected global 5G rollout coming soon which will lead to a more interconnected global economy of merchants and consumers. Faster internet speeds and a decrease in latencies will lead to even faster, more seamless payments made via a mobile device and usher in a new era of innovation. Mobile payments are an increasingly popular payment method and the arrival of 5G will only fuel and further accommodate the growth of this trend.
The Rise of Mobile Shopping
Across the globe mobile payments are on the rise. According to PPRO research, 45% of global e-commerce transactions are completed on a mobile device. From Europe to Asia, we are seeing very high adoption of e-commerce being completed on a mobile device, at 43% for Western Europe and 55% for the APAC region. Faster 5G speeds will only enhance these shopping experiences leading to unprecedented rates of mobile transactions.
Consumers worldwide are looking for easier and faster ways to shop. If they see a new game their friend has or an interesting looking jacket on the subway, they want to be able to instantly make that purchase on the go. With broader coverage areas and faster speeds, 5G will turn these preferences into a global reality.
Faster Speeds Create Seamless Experiences, For Consumers and Retailers Alike
Faster internet speeds and lower latencies will lead to better consumer online transaction experiences; this is especially for true mobile shoppers. 5G is expected to speed up data three times compared to 4G/LTE. So, utilizing mobile payment methods will lead to a smarter and more customized payment process for consumers. This will be the key for retailers and online merchants to capitalize on the benefits of 5G.
Commerce is quickly shifting towards mobile. Faster data with less latency will result in an ever-higher adoption of mobile payments due to ease of use. A consumer will be able to see a product in an ad and instantly purchase it online, no matter where they are. Faster internet speeds will open the door to vast mobile retail possibilities.
The Role of E-Wallets
Increased internet speeds will lead to higher volume and ease of online, mobile transactions. Mobile E-wallets are already a widely adopted payment method and majority have direct access and interfaces specifically for mobile adoption. The popularity and adoption of these payment methods will only continue to rise with the arrival of 5G.
According to PPRO research 23 % of US e-commerce payments occur by e-wallet and this figure jumps to 49% in China. They are also the leading form of online payment across all of the APAC region at 40% of online transactions. E-wallets have become an increasingly preferred payment method due to their ease of use and seamless smartphone integration. Their adoption is very high in Asia and Europe already, while the US is not too far behind. With faster 5G speeds all regions should see a major uptick in mobile payment usage.
The two largest mobile e-wallets in Asia are Alipay and WeChat Pay, so offering these payment methods will be vital to reaching mobile, online shoppers. In fact, WeChat Pay had 980 million users in China and in 2017 was used by Chinese consumers at a rate of one million transactions per minute. These figures will rise even higher with the rollout of 5G.
By 2021, U.S. cross-border e-commerce will reach $203 billion. The introduction of 5G will likely inflate these figures even further as the ease and facilitation of shopping on a mobile device continues to progress. Retailers and Merchants that embrace these different mobile payment methods will be ready to take advantage of this growing opportunity.
Better Mobile Experiences Leads to Further Online Shopping
The launch of 5G will provide more internet access, currently there is only a 49% global internet penetration. This will lead to more online consumers worldwide and create even faster websites. Broken down this is a10X decrease in latency and up to 100X more network efficiency. Advancements with 5G will allow for easier online shopping experiences to an even broader spectrum of digital consumers. In fact, Adobe reports 5G will boost e-commerce revenue by $12 billion by 2021. Offering mobile adapted e-wallets will prepare retailers to take advantage of this trend.
After 5G, consumers will truly be able to pay and shop wherever and whenever they want to, with little resistance and receive instant confirmation of their purchases. Merchants should see a boost in revenue due to even more seamless mobile shopping. A combination of merchant and shopper apps and faster 5G speeds will cause consumers to naturally move towards mobile commerce. We are already seeing this adoption worldwide, as in France, mobile e-wallets comprise of 21% of online transactions and after the 5G rollout this percentage should shoot up.
Merchants who don’t jump to offer these consumer-friendly payment methods like e-wallets and realize the spike in transactions completed on mobile devices will miss out on a billion-dollar growth opportunity. 5G is the launching pad to worldwide mobile transactions, it is now up to merchants to embrace the mobile trend the same way global consumers have.
Contributed by Steve Villegas, VP of Partner Management at PPRO.