62
63
CMSPI – IAC State of the Industry Report
CMSPI – IAC State of the Industry Report
Section 3.1.1 – Ecommerce Mobile Device Payments – Recent Trends
Section 3.2 – Card Network Rule CP and CNP Definitions Card-present (CP) and card-not-present (CNP) transaction environments have varying costs, customer experience considerations, and fraud liability implications for all stakeholders involved in the transaction. Global card networks developed the terms card-present (CP) and card-not-present (CNP), and as of 2024, these designations continue to be determined by the global card network branded on the card. Control of these designations enables global card networks to develop rules and incentives that perpetuate cards as a dominant consumer payment method and encourage adoption of preferred network technologies, such as near field communication (NFC) digital wallets and network tokenization. The term card-present generally refers to a transaction where the customer has dipped, swiped, or tapped a card at a physical point-of-sale machine while card-not present generally refers to transactions made via a website or mobile application. There are some instances of mobile phones being tapped at the point of sale where the card networks interpret the transaction as card-present because there is a physical interaction between the mobile device containing a stored card credential and the physical point-of sale device. Section 3.2.1 – Why does the classification matter? In many instances, the favorable costs associated with accepting card-present transaction may encourage merchants to adopt digital acceptance solutions (i.e. card-present classified tap-to-pay Pay wallet transactions) in lieu of other acceptance experiences, such as Bluetooth- enabled payments or even biometric payments like palm or face scanning if those experiences have CNP costs associated with them. This may inhibit certain customer experience innovations any time a card is used in a payment. This is true not only for physical cards, but also for many digital wallets, which use cards as back-up payment methods to stored value funds.
0% 10% 20% 30% 40% 50% 60% 70% 80%
10% 12% 14% 16% 18% 20%
0% 2% 4% 6% 8%
E-commerce as a % of transaction value
Mobile as a % of all ecommerce
Graph 3.6 – Ecommerce and Mobile Commerce Market Share (2022) 92
According to Worldpay, around 54% of global ecommerce in 2022 was made via mobile devices by transaction value. 93 In countries such as the United Kingdom, the Netherlands, the United States, France, and Canada, although ecommerce spending is high, mobile commerce is only a low proportion of this spend. By contrast, countries like South Korea, Spain, China, Singapore, Saudi Arabia, Brazil, Australia, Indonesia, and India see a high percentage of ecommerce transactions made through mobile devices. This trend can be attributed to the widespread adoption of smartphones and the use of QR codes heavily used in many of these countries. 94 This observation underscores the dynamic nature of mobile commerce and its diverse impact across global economic landscapes.
TERMINOLOGY In Section 3.1, we refer to in-store transactions as POS and online transactions as Ecommerce. These definitions significantly overlap with the card industry’s terminology of Card Present and Card Not Present, but there are important differences. Please read Section 3.2 to find out more.
92 CMSPI analysis of the Worldpay Global Payments Reports (2020-2023) 93 Worldpay Global Payments Report 2023 94 Worldpay Global Payments Report 2023
Powered by FlippingBook