As the internet economy grows, the payments landscape is changing
The internet economy is expanding, with more than 1 billion businesses going online since 2019. Stripe has had a front-row seat for this growth: last year, businesses built on Stripe processed more than $1 trillion – roughly 1% of global GDP.Global commerce is evolving quickly, and this growth has been accompanied by significant changes in the payments landscape.
Four trends stand out
1. Buy now, pay later
methods are driving new
revenue from a new wave
of customers
Buy now, pay later methods, such as Affirm, Afterpay, and Klarna, allow customers to purchase products and services without having to commit to the full amount up front. These payment methods are on track to account for more than 12% of total global economic spend on physical goods by 2025 and are especially popular with Gen Z. Our own data shows that offering them generates net-new revenue.
2. Local payment methods
are more important than
ever, especially with the
rise of real-time payments
A majority of businesses on Stripe want to expand globally.Doing so successfully requires offering customers in different countries their preferred local payment methods.Increasingly, that means offering real-time payments (RTPs), which are fast, low-cost electronic money transfers between bank accounts. They are emerging as favoured payment methods in many parts of the world, particularly India, Brazil, and parts of Europe.
3. Rising payment costs are
driving shifts to low-cost
payment methods
Payment costs have been rising globally. Regulators have introduced fee caps with mixed success, and businesses are driving shifts to low-cost payment methods to manage costs.
4. Businesses are being
more aggressive with
fraud intervention
The rise in digital transactions has made fraud prevention more important than ever. While interventions like 3D Secure (3DS) are gaining traction globally, their effectiveness varies significantly across regions, highlighting the need for tailored approaches to fraud.
The growth is being driven by adoption among younger customers: only 42% of Gen Z uses credit cards compared to 71% of Gen X. Instead, they are embracing BNPLs as an easy way to track spending without traditional cards. In other words, they aren’t just using BNPLs for specific kinds of purchases. We see this in the widespread use of BNPLs across shopping categories, including online shopping, utility spending, and car maintenance. The surge in adoption around BNPLs requires businesses to make strategic decisions about when and how to offer them. Doing so involves understanding checkout click-through rates, payment conversion rates, and the frequency of refunds and disputes.