Glossary
On the same page
To make sure we are on the same page, here is a small glossary of the main digital commerce concepts that are explored in this Beyond Borders study.
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.
How do we define verticals?
Online 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.
Travel
Airline tickets, car rentals, tour packages, and lodging purchased online
Ride-hailing and delivery apps
On-demand transportation and delivery services apps. Excludes payments made in cash.
Gaming
Spending on online games or in-game purchases, which can be played via mobile, desktop, or console. This does not include sports betting, online gambling, or games of chance.
Streaming
Video and music streaming, typically purchased as subscriptions.
SaaS (Software as a Service)
Software services that are accessed via cloud, rather than through the installation on a computer or device. Data considers both B2B and B2C purchases made via an online website or through a checkout process, including subscription and recurring payment models. Numbers do not include purchases not made through an official online checkout, such as invoice payments via online banking or wire transfer.
Digital services
Additional and varied digital goods and services, including online education, digital downloads, mobile top-ups, sports betting and online gambling, taxes, licenses, fees, and other payments done online over an e-commerce gateway (such as insurance, school tuition, etc.).
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
All locally-issued 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 –also called A2A (account-to-account) transfers. This includes proprietary bank transfer solutions developed by individual banks, account-based transfers enabled by an aggregator, real-time payment systems, or transfers made on a bank consortium platform. Examples include UPI (India), Pix (Brazil), Botón PSE (Colombia), Debin (Argentina), Netbanking (India), SPEI (Mexico), and EFT (South Africa).
Cash payments
Enable shoppers to make a cash payment for an online order through a bar code, a unique PIN, or even a QR code. Payments are usually made at an affiliated physical location or, in some cases, through internet banking, online bank transfer, or digital wallets. Examples include OXXO in Mexico, Boleto Bancário in Brazil, and most of the volume from Fawry in Egypt and PagoEfectivo in Peru (note: Fawry and PagoEfectivo are considered hybrid payment methods since they now enable digital payments as well).
Cash on delivery
When customers pay for one online purchase at the time of delivery rather than in advance. This payment is typically made in cash, but in some markets, companies also accept card or digital payments at delivery.
PagoEfectivo
The most critical offline payment method in Peru, PagoEfectivo is currently a hybrid payment method that allows both cash payments and account-based transfers. It generates a voucher or a QR Code that can be paid offline in cash, through online banking, or using their digital wallet.
Fawry
Fawry is the most important offline payment method in Egypt. Initially created for cash payments, it has now evolved into a hybrid payment solution. When Fawry is integrated at a merchant's checkout, consumers can make payments using various methods, including cash vouchers (reference code) and cards through Fawry app (either credit, debit, or prepaid).
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. Tokenized card wallets, or passthrough wallets, such as Apple Pay, are included under credit and debit card volume.
Mobile money
A mobile payment method based on active mobile lines (built into a SIM card) from telcos. Users are able to store and exchange funds using GSM network signals and USSD technology, not having to rely on an internet connection. The funds on mobile money accounts can be exchanged digitally and are withdrawable as –or depositable from– cash at authorized agent locales. Examples include M-PESA and Airtel Money.
Buy Now Pay Later (BNPL)
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 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 in the industry. Public sources include reports conducted by local industry chambers, e-commerce associations, and research firms, as well as government and central bank 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 80 e-commerce and payments 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, leveraging the perspective of their historical data collected since 2015 to arrive at the final results. In some charts, numbers might be rounded up, adding up to slightly more than 100%.
Projections are calculated based on the opinion of industry stakeholders and account for factors such as inflation, GDP growth, and regulation.
This study also incorporates data from EBANX, World Data Lab, Statista, eMarketer, the World Bank, the IMF, the UN, GSMA, ACI Worldwide, Euromonitor International, central banks, government agencies, and other organizations, as referenced throughout the text.