How do we define digital commerce?

In this study, digital commerce covers all online purchases of goods and services, regardless of the device or payment method used or vertical (including retail, travel, or digital goods and services). This includes purchases made with locally issued payment methods, cross-border purchases, B2C e-commerce, and B2B e-commerce that flows through a merchant’s online website and payment gateway.

Digital commerce verticals

Retail

Physical products bought online from a marketplace or directly from a merchant, including department stores, independent shops, online-only retailers, grocery stores, etc. Groceries and restaurant purchases made through delivery apps are categorized in another specific vertical. 

Digital goods

It comprises all three categories of digital products and services: 1) Ride-hailing and delivery apps; 2) Streaming, gaming, and other digital goods; and 3) Digital services.

  • Ride-hailing and delivery apps: excludes payments made in cash;

  • Streaming, gaming, and other digital goods: includes streaming, online gaming, online education, digital downloads, mobile top-ups, SaaS, etc.;

  • Digital services: taxes, licenses, fees, and other payments done online over an e-commerce gateway (such as insurance, school tuition, etc.). These expenses are not included if they are paid via online banking or direct debit from a check or savings account. 

Travel

Airline tickets, car rentals, tour packages, and lodging purchased online

How do we define payment methods?

APMs (alternative payment methods)

Anything other than credit or debit cards. In this study, it includes online purchases made with cash-based vouchers and cash on delivery, but also digitized and instant payments such as digital wallets, account-based transfers, and other methods that you can find in the definition below.

Credit cards

Payments made both with domestic and internationally-enabled credit cards. 

Debit cards

All locally-issued debit cards.

Account-based transfers

Transfer solutions that work through digital, fintech-offered accounts or traditional bank accounts. This includes proprietary bank transfer solutions developed by individual banks, account-based transfers enabled by an aggregator, or transfers made on a bank consortium platform – as well as UPI (Índia), Pix (Brazil), Botón PSE (Colombia), Sinpe Móvil (Costa Rica), SPEI (Mexico), and other real-time payments.

Cash-based

A payment that enables a shopper to make an online order, receive a bar code, a unique PIN, or even a QR code, and use that to make the payment in cash at an affiliated physical location or, in some cases, through internet banking, online account-based transfer or via digital wallet. In other words, it may be both a cash payment or a digital-enabled payment. Examples include OXXO in Mexico, PagoEfectivo in Peru, Fawry in Egypt, and Boleto Bancário in Brazil.

Digital wallets

A payment method that stores any funding source on file, including a credit card, debit card, account, or stored balance. Wallets use that funding source to remit payments. In this study, volumes in the "digital wallets" category are considered if one wallet brand is selected at checkout, even if a different funding source (such as a credit card) is ultimately selected as the funding source. Examples include card-on-file wallets such as PayPal and ApplePay, as well as stored balance wallets like Paga, TigoMoney and MercadoPago.

Mobile money

Also known as "MoMo", is a mobile payment method based on active mobile lines (built-into a SIM card) from telcos. Additionally to standard telecom services offerings such as data and voice, the mobile lines are also set to behave like a wallet, able to store and exchange funds using GSM network signal and USSD technology, not relying on an internet connection to operate. The funds on mobile money accounts can be exchanged digitally and are withdrawable as - or depositable from - cash at authorized agent locales. Some examples are M-PESA and Airtel Money.

BNPL

Buy Now Pay Later is defined as a payment button offered by a BNPL fintech that enables the shopper to finance the purchase at the time of checkout, with multiple payment methods, including credit cards, debit cards, account-based transfers or cash-based. It is offered worldwide but should have less traction in regions and countries where installments are predominant. 

Other

This category comprises other payment methods not explicitly listed, including direct carrier billing, cash on delivery, payments at ATMs, and others. 

Another important definition

Account ownership, in rising markets, is not a synonym for having a traditional bank account. It considers any account at a regulated institution, which includes banks but also fintech companies, mobile money providers, credit unions, microfinance institutions, or post offices. 


Over the last couple of years, financial inclusion in rising economies has been increasingly done on the side of banks, through fintech companies, and other innovative solutions for payments and financial products and services.


This is why this study adopts the definition of "account-based transfers", and not "bank transfers" (as seen in this glossary), and why we consider that financial inclusion goes far beyond bancarization itself.

Methodology notes

To develop the market data and forecasts for Latin America*, Africa**, and India in this study, PCMI (Payments and Commerce Market Intelligence) used two methodologies: 1) desk research, accessing both local and international public sources; and 2) interviews with key players of the industry. Public sources include reports conducted by local industry chambers, e-commerce associations, and research firms, as well as government statistics and reports made public by local press and organizations such as the World Bank and affiliated international organizations. The authors adopted a critical approach, identifying the holes, errors, and inconsistencies in this data to prepare it for primary research.


Then, PCMI conducted interviews with local digital commerce industry stakeholders to clarify, deepen, and streamline data collected via secondary research. Over 50 digital commerce executives were interviewed – including payment processors and acquirers, card issuers, online payment gateways, and payment service providers, as well as consultants and top merchants in all product verticals.


Once data was collected from primary and secondary sources, PCMI compared, cross-referenced, and triangulated all collected data points, through rigorous analysis, to arrive at the final results contained here. In some charts, numbers might be rounded up, adding up to slightly more than 100%. 


This study also brings data and tailored studies from EBANX, Insider Intelligence, Statista, Euromonitor International, World Bank, IMF, UN, GSMA, ACI Worldwide, Capgemini, MasterCard, Salesforce, SIIPs, Central Banks, government agencies, and other entities, as described in the chapters. 


*15 countries: Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala, Mexico, Panama, Paraguay, Peru, Uruguay


*5 countries: Egypt, Nigeria, Morocco, Kenya and South Africa

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Data Collection