In the year of COVID 19, online card payments across Central and Eastern Europe (CEE) have been growing at an impressive rate, particularly in the FMG, consumer products, sports goods, and appliances categories. Last year, contactless payments in the region increased by a massive 89% compared to 84% in Europe on average, according to an annual report published by the Bulgarian E-Commerce Association with MasterCard’s support.
In Bulgaria, the pandemic led to an exponential growth in digital shopping and consumption, involving users that had been previously out of this trend. Amid the international travel restrictions, a key contributor to transactions globally, the decline in this business has been partially compensated by the massive adoption and demand for card payments online and in physical stores. as users sought a safer, faster and more convenient way of paying for their goods in the current COVID-19-dominated world.
Data from the Bulgarian E-Commerce Association shows that Bulgaria’s leading online stores that are members of the associations registered an increase of over 60% in their online sales (number of sales and volume of sales) and an increase of more than 160% in online card payments. In particular, Mastercard posted a 200% jump in mobile payments with the average value of purchases increasing by 10%.
eCommerce in Europe increases threefold
According to Mastercard, retail purchases made using payment cards online grew by 70% globally, while the share of mobile payments reached 18% of all contactless payments in the year starting February 2020. Before the COVID-19 pandemic, e-commerce in Europe grew at an annual rate of 15%, while now this rate has increased threefold with countries such as England posting a growth of over 35% of all retail volumes in the months of April and January 2020.
Mastercard’s consumer surveys in Europe during the lockdown showed a tremendous shift in user behaviour. Some 57% of all interviewed consumers said they are now shopping online more than ever; 41.9% said they made their first online purchase or started shopping onlinetraditional and new product categories. Considering the ongoing pandemic, these trends are expected to continue and become a standard.
Biometric authentication becoming a standard
Biometric authentication has continued to gain strong foothold among banks offering the fastest and safest payment method. Currently, half of Bulgarian card issuers have introduced it to facilitate and enhance security for card holders.
A report from Research Nester estimates that the global biometric payments market may grow up to 36 times between 2018 and 2027, reaching a total opportunity size of over €13 trillion. Furthermore, according to a study by the Economist Intelligence Unit and TransUnion, 85% of global executives believe biometrics ‘will likely be used to authenticate the vast majority of payments within the next ten years’.
There are a number of trends that drive the growing adoption of biometrics in the finance industry, including the market demand for frictionless transactions, industry regulation, rising focus on fraud prevention, and, last but not least, the emergence of smart devices (mobile and IoT) that change how people interact with brands and each other. On top of all this, the ongoing pandemic has further accelerated the notion that there might be better and more efficient ways for payments to be made.