A third of US consumers still don’t use contactless payments
Paysafe’s findings were drawn from a representative sample of 8,000 people.
The COVID-19 pandemic has been the most overt cause for switching to digital transactions, but it is far from the only motivating factor:
- 33% cited their inability to make in-person payments
- 26% wanted a better way to track their spending
- 25% were concerned about fraud
Raising awareness of digital payments
An encouraging statistic is that 38% of respondents reported being more aware of a diverse range of payments solutions available to them. Furthermore, 31% are inclined to use alternative payments instead of simply relying on a credit or debit card.
Clearly, the pandemic has instigated a consumer reevaluation of their transaction options. This isn’t to say that cards are losing favour - they still consist of approximately 52.5% of all transactions - but digital wallet usage is gaining momentum: 55% in Italy, 47% in the UK, and 40% in the US. Overall, there has been a 32% global rise since the pandemic.
However, despite 50% of Americans stating that they will return to pre-pandemic shopping habits, approximately a third have yet to try contactless payment methods. These findings indicate that the pre-eminence of digital transactions is far from assured; companies in the space must continue to raise consumer awareness of alternatives.
Promoting security and choice
Philip McHugh, CEO at Paysafe, appears to consider more widespread acceptance of digital payments to be the pandemic’s silver lining:
“Consumers have adapted and gotten to grips with alternative payment methods over the last year, partly because they had to due to the pandemic.
“The good news is it’s now easier than ever for merchants to integrate into a payments platform and access a huge range of payments methods via one connection.”
McHugh also acknowledged that a likely consequence of the shift will be an increased focus on cybersecurity, with consumers’ peace of mind necessarily linked to their freedom of choice and need for a frictionless experience.
“No doubt about it, this has been a tough year for retail, but we’re also seeing many merchants – both online and offline – swiftly adapt to these trends and modify their payments offering to remain competitive; the ones that succeed to do this will be the ones who emerge from this crisis stronger than before.”
Read Paysafe's full report here
Payment startup Mollie raises US$800m at a $6.5bn valuation
Mollie, one of the fastest-growing payment processors within Europe, today announced it has raised US$800m in a Series C funding round, now valuing the company at $6.5bn. The valuation, based on Dealroom data, makes Mollie the third most valuable privately-held European fintech behind Klarna and Checkout.com.
Blackstone Growth (BXG), Blackstone’s growth equity investing business, led the investment and included participation from EQT Growth, General Atlantic, HMI Capital and Alkeon Capital. TCV who led the Series B investment in September 2020 also participated in the funding round.
According to the company, the funding will fuel Mollie’s international expansion, team scaling, and continued investment in product and engineering.
“There’s something very special about Mollie. In the three months since I joined the team we’ve achieved so much: making preparations for a full launch in the UK, driving 600% growth in Germany and hiring an impressive set of team members and executives,” said Shane Happach, CEO, Mollie. “Over the past months, Mollie has been receiving a remarkable amount of interest from some of the world’s foremost fintech investors. In bringing on BXG, we believe we have an investor who can help Mollie in our next phase of growth. The involvement of our new group of investors demonstrates confidence in Mollie’s growth, strategy and product set.”
The Amsterdam-based business was launched in 2004, and is one of the largest PSPs in Europe. Today, it serves more than 120,000 monthly active merchants of all sizes across the continent. During 2020, Mollie processed more than 10 billion Euros in transactions and is on track to handle more than 20 billion Euros during 2021.
“Mollie is one of Europe’s most exciting high-growth businesses and is at the forefront of enabling next-generation payments for online SMEs across Europe. We are excited to partner with Mollie’s fantastic team and look forward to leveraging Blackstone’s capital, expertise and global network to unlock the company’s next phase of growth,” said Paul Morrissey, who leads European investing for Blackstone Growth. “This investment underlines Blackstone’s confidence in Europe as a place for high-growth companies to thrive.”
In Europe, FinTech app usage grew by 72% directly after the pandemic outbreak, while the top seven digital banks in the US grew their cumulative user base by 39% throughout the year. Competition in payments has grown over the past few years with fintech players like Stripe, Square and Netherlands-based Adyen all competing for a bigger share of the market.
Unlike its American rivals, Mollie says it mainly focuses on transactions with small businesses in Europe. Shane Happach, CEO of Mollie said: “A lot of the bigger players in online payments come out of the US, like PayPal,”. Adding that even Visa and Mastercard are US companies.
“A lot of investors don’t have a bet on Europe,” Happach said. “Mollie’s one of those unique assets that offers exposure.